ARCHIVED — Vol. 146, No. 50 — December 15, 2012

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Marihuana for Medical Purposes Regulations

Statutory authority

Controlled Drugs and Substances Act

Sponsoring department

Department of Health

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the regulations.)

Executive summary

Issues: In 2001, the Marihuana Medical Access Regulations (MMAR) were promulgated. The MMAR sets out a scheme for Canadians to access marihuana for medical purposes, if they have the support of a medical practitioner.

Over the years, stakeholders have expressed various concerns about the Marihuana Medical Access Program (the Program or MMAP). Program participants generally dislike the application process, and the fact that only a single strain of marihuana is available for purchase from Health Canada. Other stakeholders have expressed health, safety, and security concerns relating to the production of marihuana by individuals in homes and communities. Their specific concerns relate to the potential for diversion of marihuana to the illicit market due to limited security requirements, the risk of violent home invasion by criminals attempting to steal marihuana, fire hazards due to faulty or overloaded electricity installation to accommodate high intensity lighting for its cultivation, and humidity and poor air quality. Individual producers who are ill may be more vulnerable to health risks associated with mould. As more individuals receive licences to produce marihuana for medical purposes, the overall risk to Canadians increases.

Rapid growth in the number of authorized users has also had significant implications for the administration of the Program, leading sometimes to long application processing times and higher Program administration costs for Health Canada. Finally, over the years, Canadian courts have found various parts of the MMAR to be invalid, resulting in changes that impact program delivery.

Description: The proposed Marihuana for Medical Purposes Regulations (MMPR) would treat dried marihuana as much as possible like a medication by creating a licensing scheme for the commercial production and distribution of dried marihuana for medical purposes. The proposed MMPR would modify the New Classes of Practitioner Regulations (NCPR), the Narcotic Control Regulations (NCR) and eventually repeal the MMAR. At the same time, changes to the Marihuana

Exemption (Food and Drugs Act) Regulations (MER) are also being proposed. Health Canada would no longer issue authorizations to possess marihuana for medical purposes to individuals. This is expected to make accessing marihuana for medical purposes more efficient for program participants. It would also give them more options with respect to obtaining the support of an authorized health care practitioner, more choices of strains and suppliers, and provide increased access to quality-controlled marihuana. This, as well as ending Health Canada’s role in the production and supply of marihuana, would also reduce the cost of running the Program.

Following a transition period, individuals would no longer be licensed to produce marihuana, an activity which often occurs in homes. This would address the public health, safety and security concerns raised by stakeholders.

The proposed MMPR would authorize three key activities: the possession of dried marihuana for medical purposes by individuals who have the support of an authorized health care practitioner; the production of dried marihuana by licensed producers; and the sale and distribution of dried marihuana by specific regulated parties to individuals who can possess it. Licensed producers would be subject to regulatory requirements related to security; good production practices; packaging, labelling and shipping; record keeping and reporting; and distribution. They would also be subject to Health Canada inspections.

Cost-benefit statement: The main economic cost associated with the proposed MMPR would arise from the loss to consumers who may have to pay a higher price for dried marihuana. The analysis assumes a price increase from an estimated $1.80/g to $5.00/g in the status quo to about $7.60/g in 2014, rising to about $8.80/g, with a corresponding average annualized loss to consumers due to higher prices of approximately –$166.1M per year for 10 years. The major benefits of the proposed MMPR are projected to include reduction in safety and security risks posed by marihuana cultivation in homes, reduction in Program administrative costs, and benefit to producers due to a higher market price and a reduction in economic inefficiency from the removal of current government subsidies on marihuana sold by Health Canada. On average, the estimated total annualized benefit is $149.8M per year. Consequently, the quantitative analysis indicated an overall discounted net loss of –$109.7M for the first 10 years of the proposed MMPR (2014 to 2024) or, on average, approximately –$16.35M a year.

Given the unique nature of the regulatory proposal and the need to make assumptions about some aspects of what, until now, has been an illicit market with the exception of the supply produced under licences to produce, and under contract with Health Canada, the quantitative analysis was supplemented by a comprehensive qualitative evaluation of potential benefits which could not be quantified or monetized. These were considered highly contingent on a number of economic, social and regulatory factors which have been factored into the Program evaluation, but which may not emerge until near the end of, or after, the 10-year projection period for the quantified cost-benefit analysis (CBA). The qualitative analysis, however, showed that these benefits are likely to be significant. Further detail can be found in the “Non-quantified benefits” section of this document.

“One-for-One” Rule and small business lens: Canadian courts have determined that, under the Canadian Charter of Rights and Freedoms, individuals who have demonstrated a medical need for marihuana have a right to reasonable access to a legal source of marihuana for medical purposes. At the same time, marihuana is a controlled substance for which there is considerable risk of diversion to the illicit market. Thus, there is a need to ensure that sites which produce marihuana for medical purposes are secure and have secure distribution methods. Hence, while it is recognized that the proposed MMPR would impose administrative burden on business, it is also recognized that the unique and exceptional circumstances, in combination with the findings of Canadian courts that individuals who need marihuana for medical purposes have a right to reasonable access to a legal source of marihuana under the Charter, merit an exemption from the “One-for-One” Rule. Health Canada would not be required to offset the burden associated with this proposal with an equivalent reduction in administrative burden.

The small business lens requirements apply to the proposed MMPR. As licensed producers are all expected to be small businesses, regulatory compliance flexibility, such as outcome-based security requirements rather than prescriptive security requirements, has been built into the proposed MMPR for all businesses.

Domestic and international coordination and cooperation (if applicable): The proposal is consistent with Canada’s international trade obligations, as well as its commitment to maintain control over the production and distribution of marihuana, as required by international conventions on the control of narcotic drugs and psychotropic substances. In addition, Health Canada has notified the United States Drug Enforcement Administration that a new program is under consideration wherein individuals would no longer be licensed to produce their own marihuana and supply would come only from licensed producers. Federally, the proposed MMPR establish new requirements that are consistent with Health Canada’s responsibility to regulate activities with controlled substances. The proposal takes provincial/territorial jurisdiction into consideration, particularly concerning issues such as establishing requirements for local businesses and the delivery of health services.

Performance measurement and evaluation: An evaluation of the proposed MMPR would occur five years after implementation and every five years thereafter. The evaluation would assess the achievement of outcomes of the proposed MMPR along with those of any administrative and program support systems put in place. Additionally, a formative evaluation would occur around the end of the first year of implementation. This evaluation would focus on implementation issues and identify potential risks to achieving the objectives of the regulatory reform.

Background

Marihuana for medical purposes is regulated under both the Controlled Drugs and Substances Act (CDSA) and the Food and Drugs Act (FDA). The CDSA and its regulations provide a legislative framework for the control of substances that can alter mental processes and that may produce harm to the health of an individual and to society when distributed or used without supervision. The legislative framework prohibits the possession, trafficking, production, importation and exportation of controlled substances except where authorized, such as under regulations.

The FDA and its regulations provide a framework to regulate the safety, efficacy and quality of drugs. The Food and Drug Regulations (FDR) set out a framework for the authorization of drugs for sale in Canada. Drug manufacturers submit evidence on the effectiveness, dosage, route of administration, contraindications, side effects, and quality of a drug. If Health Canada reviewers conclude that the overall benefits of the drug outweigh its risks, the product will be authorized for sale in Canada.

There are a number of products containing cannabis which have been authorized for sale under the FDR in Canada. These include

Sativex®, a buccal spray containing extracts of cannabis with standardized concentrations of delta-9-tetrahydrocannabinol (THC) and cannabidiol (CBD). It is authorized to treat certain symptoms associated with multiple sclerosis. It is also conditionally authorized for pain relief in adults with advanced cancer;

Marinol®, a capsule containing synthetic THC. It was authorized for the treatment of AIDS-related anorexia, and nausea and vomiting due to cancer chemotherapy, but was discontinued in Canada; and

Cesamet®, a capsule containing nabilone, a synthetic cannabinoid. It is authorized for the management of nausea and vomiting associated with cancer therapy.

In all of these cases, the manufacturers were required to meet the requirements of the FDA and its regulations in order to sell these products in Canada.

To date, scientific studies do not demonstrate conclusively that dried marihuana is safe and effective for medical use. Most scientific studies to date focus on chemicals sourced from marihuana, not dried marihuana itself. Consequently, dried marihuana has not been authorized as a therapeutic product in Canada or in any other country. However, Canadian courts have found that individuals who need marihuana for medical purposes have a right to reasonable access to a legal source of marihuana. Therefore, production of dried marihuana in the past was exempted from application of the FDA and its regulations with the exception of marihuana sold or imported to be used for the purpose of a clinical trial.

Canadians have been able to access dried marihuana for medical purposes since 1999, when the Marihuana Medical Access Program (the Program) was first established. At the time, individuals were authorized to possess dried marihuana and/or produce a limited number of marihuana plants for medical purposes via the issuance of an exemption under section 56 of the CDSA.

In 2000, the Ontario Court of Appeal (R. v. Parker) held that the prohibition on the possession of marihuana violated the right to liberty and security of a person under the Charter, because Mr. Parker could not find a practically available legal route to possess dried marihuana for medical purposes. In response, the MMAR were established in 2001 and set out a scheme by which seriously ill Canadians can, with the support of a medical practitioner, obtain an authorization to possess dried marihuana for their own personal medical use. Under the current MMAR, authorized persons have three options to obtain a supply of dried marihuana:

They can produce their own supply under a Personal Use Production Licence (PUPL);

They can designate an individual to produce it on their behalf under a Designated Person Production Licence (DPPL); or

They can purchase dried marihuana from Health Canada, which contracts a private company — Prairie Plant Systems Inc. (PPS) — to produce and distribute marihuana for the Program. (see footnote 1)

The supply and distribution scheme established by the MMAR has been amended several times. In some cases, this has been the result of concerns expressed by stakeholders. In others, it has been to address Court decisions that have invalidated sections of the Regulations, which have been found to hinder access.

In 2003, the Ontario Court of Appeal (Hitzig v. Canada) held that the MMAR were constitutionally defective because they did not provide for reasonable access to a legal source of supply of marihuana for medical purposes. The Court invalidated five provisions of the MMAR that it found constituted barriers to eligibility and supply but acknowledged that the Government could choose to adopt a fundamentally different approach. The MMAR were amended to give national effect to certain elements of the Court’s remedy, and also to implement an option for authorized persons to obtain access to a legal supply of dried marihuana and marihuana seeds. However, the requirements for a medical document and for a daily limit fixed by a medical practitioner were found to be reasonable by the Court.

In 2005, based on a broader review of the MMAR and on input received from stakeholders during a comprehensive consultation process, Health Canada proceeded with a second phase of amendments to the MMAR. The primary objective of the amendments was to streamline the regulatory requirements associated with applying for an authorization to possess. Both the applicant’s declaration and the medical declaration were therefore simplified. The MMAR were also amended to provide limited authority for pharmacists to supply marihuana to authorized persons. These amendments were intended to maintain an appropriate balance between providing seriously ill persons with reasonable access to a legal source of dried marihuana and the need to regulate marihuana.

In 2009, the MMAR were amended to raise the limit on the number of production licences a designated person can hold from one to two. This followed a 2008 Federal Court of Appeal decision (Sfetkopoulous v. Canada) to uphold the Federal Court’s declaration that the one producer to one user ratio set out in the MMAR unjustifiably limited the ability of authorized persons to access marihuana for medical purposes. The Federal Court was of the view that licensed producers having larger operations could make economies of scale and a level of income that would allow them to put in place quality control and security measures. The Court also observed that with fewer producers having larger operations, a system of inspection would be much easier to sustain than the current system of one consumer to one producer. The amendment was an interim measure intended to address the Court’s decision while the Program and the MMAR were being reassessed.

In 2010, Health Canada amended the MMAR to address the 2009 British Columbia Supreme Court decision (R. v. Beren) that struck down the one producer to one user ratio as well as the limit of three producers per location. The Court adopted the reasoning in Sfetkopoulos and was of the view that licensed producers having larger operations could provide an adequate supply, carry out research on the efficacy of varying strains of marihuana and make economies of scale. The Government had already addressed the producer to user ratio issue by raising the limit on the number of production licences a designated person can hold from one to two. This regulatory initiative introduced a new limit of four to the number of production licences that can be issued with reference to the same production site. In other respects, the Court ruled that the MMAR requirement for the support of a physician was justified.

The Court decisions leading to the 2009 and 2010 amendments support Health Canada’s position that dried marihuana for medical purposes should be produced and distributed as much as possible in the same manner as a medication.

Issue

Growth in Program participation has had unintended consequences for the administration of the MMAR, but more importantly, for public health, safety and security as a result of authorizing individuals to produce marihuana under PUPLs and DPPLs in private dwellings.

In 2002, 477 individuals were authorized to possess marihuana for medical purposes. As of August 13, 2012, this had grown to 21 986 individuals. If the Program continues to grow at this pace, it is estimated that by 2014, over 50 000 individuals will be authorized to possess marihuana for medical purposes.

One result of increased participation in the Program is increased application volume for Health Canada. This results in increased staffing costs, but more importantly, it results in a 10-week service standard for processing applications. Many Program participants have expressed concerns regarding the length of time it takes to obtain an authorization to possess.

Of 21 986 current Program participants, 13% access Health Canada’s supply of dried marihuana, 64% produce under a PUPL, and 16% produce under a DPPL. The remaining 7% indicate in their application that they will buy from Health Canada, but ultimately do not. Health Canada does not have access to information regarding where these Program participants obtain their supply of marihuana for medical purposes.

Increases in the number of licences, as well as the co-location of up to four licences on one site, can result in large quantities of marihuana being produced in homes and communities. In addition, the average daily amount has continually increased since 2002 to almost 10 g per day now which, if produced indoors, is approximately 49 plants. Under the MMAR, the number of plants that may be produced under a licence to produce is calculated based on the daily amount agreed upon by the medical practitioner and the applicant. Program participants who either produce their own or have designated producers are the group where the daily amount has increased the most. There are now approximately 70% who produce 25 plants or more.

Municipalities and first responders, such as fire and police officials, have raised serious public health and safety concerns regarding production of marihuana in private dwellings. Under the Program, applicants are not required to disclose their intent to produce to local authorities. Production sites, most often in private dwellings that are not constructed for large-scale horticultural production, are often in locations unknown by local authorities. Production activities are also linked to the presence of excess moisture in homes creating a risk of mould (particularly associated with drying of marihuana); electrical hazards creating a risk of fire; and exposure to toxic chemicals like pesticides and fertilizers creating risk to residents, including children. Such issues may not only have an impact on individual producers, but also potentially on those living at the same address, adjacent residential units, and/or in the surrounding community, who may not even suspect the existence of these risks. Because the MMAR were never intended to permit larger-scale marihuana production, they do not adequately address these public health, safety and security concerns. There are practical difficulties in imposing stringent quality and safety standards on production operation by producers of marihuana for medical purposes that may lack the capacity to implement them.

Police have also raised concerns that residential production activities leave the Program vulnerable to abuse, including criminal involvement and diversion to the illicit market, particularly given the attractive street value of marihuana ($10–$15/gram for dried marihuana). It is impossible to conduct effective inspection of the numerous production sites across the country, particularly given the legal requirement to either obtain permission, or a warrant, to enter a private dwelling. Finally, production in homes may leave residents and their neighbours vulnerable to violent home invasion by criminals who become aware that valuable marihuana plants are being produced and stored in the home.

Another implication of Program growth is an increase to the cost of producing and distributing dried marihuana for Health Canada. The existing supply contract has a value of $16.8 million (excluding GST) for a three-year period, ending on March 31, 2013. An additional option year has been built into the contract, and will need to be exercised. It is estimated that this additional year will cost Health Canada $9.7 million. These high contract costs are despite the fact that only a minority of Program participants indicate this supply option in their application. Health Canada heavily subsidizes the cost of marihuana for medical purposes by covering the shipping costs and charging only $5/gram, an amount substantially below the cost of production and distribution. The Government collected approximately $1,686,600 in revenue from sales of dried marihuana and seeds in the 2011–2012 fiscal year.

Objectives

The objective of the proposed MMPR is to reduce the risks to public health, security and safety of Canadians, while significantly improving the way in which individuals access marihuana for medical purposes.

To reduce the risks to public health, security and safety of Canadians, a new supply and distribution system for dried marihuana that relies on commercial production of marihuana for medical purposes would be established. Security requirements would be in place for the production site and key personnel of the licensed producer. Standards for packaging, transportation and record keeping would contribute to achieving security objectives.

The process for individuals to access marihuana for medical purposes would no longer require applying to Health Canada. Individuals would be able to obtain marihuana, of any strain commercially available, with information similar to a prescription from an authorized health care practitioner (a physician or, potentially, a nurse practitioner). Quality and sanitation standards appropriate for a product for medical use will be in place. In line with other controlled substances, personal and designated production would be phased out. This would reduce the health and safety risks to individuals and to the public while allowing for a quality-controlled and more secure product for medical use.

Health Canada would no longer receive and process applications or issue authorizations and licences, nor continue to produce and supply marihuana for medical purposes. Health Canada would not enter into future contractual arrangements for the production and distribution of marihuana for medical purposes. The new regulatory scheme returns Health Canada to its traditional role of regulator rather than producer and service provider, while striking a better balance between access and risks to public health and safety.

Description

The proposed Marihuana for Medical Purposes Regulations would authorize the following key activities:

the possession of dried marihuana by individuals who have the support of an authorized health care practitioner to use marihuana for medical purposes;

the production of dried marihuana by licensed producers only; and

the direct sale and distribution of dried marihuana by specific regulated parties to individuals who are eligible to possess it.

The proposed MMPR would also allow individuals who hold an authorization to possess under the MMAR to transition to the new framework using their authorization for up to one year after its date of issue (unless a period of usage of less than 12 months has been indicated in the medical declaration). Individuals could also transition using a medical declaration issued under the MMAR.

Licences to produce issued under the current MMAR would be phased out, while renewals would continue normally. New licences to produce would not be issued if the application is submitted after September 30, 2013, because there would not be enough time to produce a crop before the repeal of the MMAR on March 31, 2014. Licences to produce would also not be amended for a site change after September 30, 2013, for the same reason (see “Implementation, enforcement and service standards”). All licences to produce would end on March 31, 2014.

1. Possession of dried marihuana by individuals who have the support of an authorized health care practitioner

Possession of dried marihuana

Individuals would no longer have to apply to Health Canada for an authorization to possess dried marihuana for medical purposes. Instead, individuals who require marihuana for medical purposes would be able to legally possess dried marihuana if it was obtained under the proposed MMPR from a pharmacist or licensed producer with a supporting medical document from an authorized health care practitioner, or directly from an authorized health care practitioner. Similarly, an individual responsible for a person who requires marihuana for medical purposes would be able to legally possess dried marihuana under these circumstances. In both cases, individuals would be authorized to possess the lesser of 150 g or 30 times the daily quantity stipulated by the authorized health care practitioner.

Under the proposed MMPR, individuals would be able to demonstrate that they are in legal possession of dried marihuana by showing a law enforcement official a client-specific label affixed to the product, or an accompanying client-specific document, as well as an appropriate piece of photo identification (see “Packaging and labelling”). Licensed producers would also be required to confirm to a member of a Canadian police force, in the context of an investigation, whether a named individual is a registered client or an individual responsible for a registered client.

Obtaining a supply of dried marihuana

To obtain dried marihuana for medical purposes, an individual would see an authorized health care practitioner and obtain a medical document, requirements for which are specified in the proposed MMPR, signifying their support for their access to marihuana and indicating, among other things, the supported daily quantity in grams. They could then send the original medical document to a licensed producer of their choice. A medical document would allow an individual to register with a licensed producer for the period of use indicated by the authorized health care practitioner, but for no more than one year. After registering as a client, individuals would be able to order dried marihuana from the licensed producer. However, licensed producers would not be allowed to sell or provide more than 30 times the daily amount in any 30-day period, taking into consideration the expected length of time for the shipment to reach the registered client, nor would they be able to ship more than 150 g at a time. Health Canada would publish the name and contact information of each licensed producer on its Web site to help individuals select a supplier. If an individual wishes to purchase a variety of strains that are not all available from one licensed producer, the proposed MMPR would permit the individual to do so by obtaining a new medical document. They would have to discuss this with their health care practitioner. The health care practitioner would have to divide the daily quantity between multiple medical documents.

A registration would not be transferable from one licensed producer to another. If an individual wanted to change licensed producers, they would be required to obtain a new original medical document which they would use to register with a new licensed producer. This is consistent with practices for prescription narcotics, as these are not transferable from pharmacy to pharmacy. The CDSA requires individuals seeking or obtaining an authorization to obtain a controlled substance from a practitioner to disclose to the practitioner the particulars of any controlled substance they obtained or any authorization to obtain any controlled substance that they received in the 30 previous days.

As an alternative to registering with a licensed producer, individuals could obtain their supply of marihuana from a pharmacist, if the legislation and regulations in the pharmacist’s province or territory of practice allowed this. As for other narcotics, pharmacists dispensing marihuana directly would have to do so in accordance with the NCR.

Authorized health care practitioners

Health Canada maintains that the determination as to whether the use of dried marihuana for medical purposes is appropriate for a particular individual is best made through a discussion with their authorized health care practitioner. The proposed MMPR would include a new definition of authorized health care practitioner that includes physicians in all provinces and territories (P/Ts), and would also include nurse practitioners in P/Ts where supporting access to marihuana for medical purposes is included under their scope of practice or in legislation. This is consistent with Health Canada’s approach to other controlled drugs and substances used for medical purposes in the New Classes of Practitioners Regulations (NCPR).

In the NCPR, marihuana is listed as a substance that nurse practitioners are not able to prescribe; however, following consideration of feedback received during stakeholder consultations, the proposed MMPR amend the NCPR to remove this exclusion.

This role would not be expanded beyond nurse practitioners. Nurse practitioners are regulated professionals in all provinces and territories. With the exception of the Yukon, they are authorized to autonomously diagnose and treat health conditions and prescribe medications. This is because they have gained additional competencies through training and education, as well as substantial clinical experience. In most jurisdictions, they have also been deemed to have the competencies required to prescribe medications that contain controlled substances.

The proposed MMPR do not include categories of symptoms and conditions, and there would no longer be a requirement for some individuals to obtain the support of a specialist in addition to that of their primary care physician in order to access marihuana for medical purposes. An individual who needs to access dried marihuana for medical purposes could obtain a medical document from an authorized health care practitioner, or obtain dried marihuana directly from an authorized health care practitioner. The medical document would contain similar information to that on a prescription. Specifically, the authorized health care practitioner would have to indicate their licence information, the location of the medical assessment, the name and date of birth of their patient, a period of use of up to one year, and a daily quantity of marihuana in grams.

Under the current MMAR, physicians who sign medical declarations must sign a statement indicating they are aware that no notice of compliance has been issued under the FDR relating to the safety or effectiveness of dried marihuana, as well as a statement indicating that conventional treatments have been tried or considered and are ineffective or medically inappropriate. The proposed MMPR do not require authorized health care practitioners to make specific declarations with respect to the use of marihuana for medical purposes, the effectiveness or appropriateness of other therapies, or the regulatory status of marihuana. This is expected to reduce the complexity of the physician’s role in access to marihuana for medical purposes.

Authorized health care practitioners may wish to receive more comprehensive information about the potential risks and benefits of using marihuana for medical purposes in order to guide them in their discussions with their patients. Health Canada has established an expert advisory committee to assist in providing comprehensive scientific information about the uses of marihuana to authorized health care practitioners.

2. Production of dried marihuana by licensed producers

The proposed MMPR set out a licensing scheme that is intended to allow for larger-scale production, comparable to that for other narcotics used for medical purposes. This would permit commercial production while regulating the quality and security of dried marihuana, thus reducing public health, safety and security risks.

Production sites would only be located indoors, and not in a private dwelling. This would reduce the risks of diversion posed by outdoor production and the health and safety risks associated with producing marihuana in a private dwelling. Indoor production also addresses the risk of cross-contamination with other nearby crops, particularly industrial hemp.

Licensing

Either an individual or a corporation would be eligible to become a licensed producer. In their application, applicants would have to describe the activities they wish to conduct with marihuana and the purpose for conducting those activities. Licensed producers could also become licensed to conduct certain activities with standardized samples of chemicals that occur naturally in the marihuana plant in order to conduct analytical testing of dried marihuana. For example, they would need to possess pure samples of THC and cannabidiol in order to determine the percentage of THC and cannabidiol in marihuana. In the proposed MMPR, and in this document, cannabis is an inclusive term that is used to capture all of the substances in the scope of the proposed MMPR (e.g. substances such as THC and cannabidiol, as well as marihuana). (see footnote 2)

A number of conditions would have to be met before the issuance of a licence. The licensed producer would have to designate key personnel under their licence. The senior person in charge (SPIC) would have overall responsibility for management of the activities carried out at the licensed site, while the responsible person in charge (RPIC), and alternate RPICs if applicable, would supervise all activities being carried out with marihuana and cannabis other than marihuana (i.e. pure samples of THC and cannabidiol). Key personnel, along with directors and officers in the case of a corporation, would have to hold a valid security clearance, issued by the Minister of Health (see “Security” section for further detail).

The applicant for a production licence would also have to provide a written notification of their application to the local police force, local fire authority and local government. The notice would have to specify the activities for which the licence would be sought, and the address of the site at which activities would be conducted.

The applicant would have to provide information that allows Health Canada to assess whether the applicant has certain key measures in place. The applicant would have to provide the following:

a detailed description of the physical security measures that would be put in place at the site;

a detailed description of how the licensed producer would keep records of their activities with marihuana and cannabis other than marihuana;

a quality assurance report that shows that the buildings, equipment and proposed sanitation program to be used meet the good production practices (see “Good production practices” section) requirements;

a copy of the notices provided to the local police force, local fire authority, and local government;

the maximum quantity of dried marihuana to be produced and sold or provided under licence (if applicable); and

floor plans of the site.

The proposed MMPR also outline a number of reasons for which the Minister of Health (the Minister) would be required to refuse to issue, renew or amend a licence. These include

grounds to believe that false or misleading information has been provided with the application;

information received from a peace officer or other authority gives the Minister reasonable grounds to believe that the applicant has been involved in diversion of a controlled substance;

the issuance or continuation of the licence would likely create a risk to public health, safety or security, including diversion; and

key personnel do not hold a valid security clearance.

Once issued, a licence would be valid for up to three years, and could be renewed. The proposed MMPR also set out a process for amendments to any information on the licence (e.g. the licensed producer wishes to increase its production yield or change sites).

Obtaining starting materials

Licensed producers would be able to legally obtain their starting materials in several ways. With a specific authorization from Health Canada, they would be able to purchase marihuana seeds or marihuana plants from individuals who hold valid PUPLs and DPPLs, or they would be able to import marihuana with the appropriate permits (see “Import and export”). They could purchase Crown stock seeds from Health Canada. Finally, the proposed MMPR would permit licensed producers to obtain marihuana from one another or from a licensed dealer under the NCR.

Import and export

Licensed producers would be permitted to engage in the import or export of marihuana if they have obtained an import or export permit from Health Canada. The import/export permit scheme would be similar to that for other controlled substances and is intended to maintain control over the movement of controlled substances, consistent with Canada’s obligations under international conventions on the control of narcotic drugs and psychotropic substances.

Good production practices

The FDA would apply to marihuana produced under the proposed MMPR and would prohibit licensed producers from selling dried marihuana that had been produced under unsanitary conditions or that had been adulterated.

Licensed producers would also be subject to Good production practices (GPP) outlined in the proposed MMPR. These requirements would require cleanliness of the premises and equipment. The licensed producer would also be required to employ a quality assurance person with appropriate training, experience, and technical knowledge to approve the quality of dried marihuana prior to making it available for sale. Finally, licensed producers would have to test dried marihuana for microbial and chemical contaminants and ensure they are below generally accepted tolerance limits for herbal medicines for human consumption, as established in any publication referred to in Schedule B to the FDA (i.e. various pharmacopoeia and formularies). These requirements would provide individuals who require marihuana for medical purposes with access to a product that does not — by reason of the manner in which it was produced, packaged, labelled or stored — pose undue risk to the health of an individual.

To date, dried marihuana has not been subject to all requirements of the FDA and its Regulations. Therapeutic products, such as echinacea or acetaminophen used for medicinal purposes, are subject to manufacturing controls. In moving to treat marihuana like a medication and taking into consideration concerns about quality control and other aspects governed by the FDA, the FDA would apply to activities of licensed producers. The FDR would apply as set out in the new MER.

Packaging and labelling

Dried marihuana would have to be packaged in a tamper-evident and child-resistant container. The maximum package size would be 15 g. Each package would contain standard information about the product, including the weight in grams, the percentage by weight of delta-9-tetrahydrocannabinol (THC) and of cannabidiol, the packaging date, the expiry date if one has been established by stability testing, and a warning statement to “KEEP OUT OF REACH OF CHILDREN.”

The licensed producer, pharmacist, or authorized health care practitioner would also have to affix a client-specific label, similar to a patient-specific prescription drug label, to the package of dried marihuana. This label would contain the names of the client and the authorized health care practitioner who provided the medical document, the daily quantity of dried marihuana as indicated on the medical document, and the end of the validity period as indicated on the medical document. The label would also include the shipping date and the anticipated date of delivery to the registered client. The licensed producer would have to produce a separate duplicate document of this label to send to clients. This duplicate document or the product label, as well as an appropriate piece of photo identification, could serve to demonstrate legal possession (see “Possession of dried marihuana” above).

Each package of dried marihuana sold to a client would also need to be accompanied by a copy of the most current version of the Health Canada document titled Information on the Use of Marihuana for Medical Purposes. This document indicates that the safety and efficacy of dried marihuana for medical purposes has not been established and provides a summary of the known information about the uses and risks of marihuana for medical purposes so that individuals could be informed about their treatment choice.

The FDA provisions will also apply to prohibit labelling, packaging or selling in a manner that is false, misleading or likely to create an erroneous impression about the character or safety of the drug. For example, unsubstantiated health claims cannot be put on product packaging. Advertising any narcotic to the general public is prohibited under the NCR, and this prohibition would continue to apply to dried marihuana. As with other narcotics, this is intended to prevent known and potential harms to the health of Canadians who are vulnerable with respect to advertising of prescription drugs because they do not have the level of expertise to make informed choices regarding their use. To help individuals select a supplier, Health Canada would publish the name and contact information of licensed producers on its Web site.

3. Direct sale and distribution of dried marihuana to individuals authorized to possess it

Individuals who require marihuana for medical purposes have several avenues to obtain it under the proposed MMPR. Dried marihuana could be sold or provided directly to registered clients by the licensed producer through secure shipping only. It could also be sold or provided by pharmacists, authorized health care practitioners, and hospitals, who could purchase it directly from licensed producers.

Distribution through licensed producers

The primary means of distribution of dried marihuana would be directly from the licensed producer to the registered client using secure shipping methods, as the proposed MMPR do not allow for store-front or retail distribution centres. This is how PPS has distributed dried marihuana and marihuana seeds to Program participants since 2003. This method has proven to be secure and to adequately mitigate the risk of diversion.

Health Canada would not regulate the price of marihuana under the MMPR. It would be up to licensed producers to set the price.

Before selling dried marihuana to an individual, a licensed producer would have to register the individual as a client. In the process of registering a client, licensed producers would have to verify that the supporting authorized health care practitioner is entitled to practice their profession in the province in which they were consulted by the prospective client and that they have not been prohibited from prescribing narcotics. These tasks are similar to those conducted by a pharmacist when filling out a prescription. The licensed producer would also have to confirm with the office of the authorized health care practitioner that the information in the medical document, including the daily quantity, is correct and complete.

Shipping

Dried marihuana would have to be shipped directly to a registered client using a shipping service that includes a means of tracking the package during transit. It would have to be sent in only one shipment per order. Finally, dried marihuana would have to be securely packed and shipped in a container that would not allow the contents to be identified visually or by odour.

Dispensing dried marihuana through pharmacists

The current MMAR allows for pharmacists to dispense marihuana that has been produced by a licensed dealer under contract with Her Majesty in right of Canada to the holder of an authorization to possess. This provision was added in 2005 when some provinces and territories expressed an interest in allowing pharmacists to undertake this activity. While it is permitted under the current MMAR, dispensing of marihuana for medical purposes by pharmacists has never been done to date.

Under the proposed MMPR, pharmacists would have the ability to order dried marihuana from licensed producers and to dispense it for medical purposes in accordance with the NCR, provided that P/T regulations governing the practice of pharmacy permit them to do so. In P/Ts where pharmacists are authorized to dispense dried marihuana for medical purposes, individuals would be able to go to a pharmacy with their medical document to receive dried marihuana. Stakeholders, including some P/T health authorities, felt that this would bring the distribution of marihuana more in line with the distribution of narcotic medications.

Other overarching requirements

Security

According to law enforcement officials, organized crime groups are involved in the trafficking of marihuana, and the profits derived from this activity allow them to support themselves and participate in the trade of other illicit commodities. The security measures required in the proposed MMPR are therefore designed not only to ensure that licensed producers take steps to ensure the physical security of their site, but also to prevent infiltration by criminal groups who may wish to exploit the lawful production of marihuana for medical purposes for illicit purposes. In contrast, licences to produce issued under the current MMAR do not carry any prescriptive physical security requirements; therefore, the associated production sites are more vulnerable to violent intrusions, theft and diversion.

Health Canada’s Directive on Physical Security Requirements for Controlled Substances establishes security requirements for the storage of all controlled substances. These requirements are scaled to the illicit market value of the controlled substance and to the crime rates in various areas. This directive would apply to the storage of dried marihuana by licensed producers.

The proposed MMPR also set out physical security requirements for the entire site, as well as for restricted-access areas. Restricted-access areas would include all areas where a licensed activity is conducted with marihuana and cannabis other than marihuana (i.e. a lab, the production room, the area where dried marihuana is packaged and labelled). Access to these areas would have to be restricted only to individuals whose presence is required because of their work responsibilities. Licensed producers would have to put systems in place to ensure that access is controlled at all times, as well as 24-7 visual monitoring systems to detect unlawful conduct. The restricted areas would also have to be secured by an intrusion detection system that would detect attempted or actual unauthorized access to the area. The same principles of visual monitoring and intrusion detection would apply to the perimeter of the entire site. Licensed producers would also have to ensure the site and its restricted areas are designed in a manner that prevents unauthorized entry. Should an applicant for a licence fail to demonstrate that they have put in place appropriate physical security measures as outlined in the proposed MMPR, the production licence would be refused.

The proposed MMPR also include requirements that the holder of the production licence, directors and officers (in the case of a corporation) and all key personnel must hold enhanced security clearances prior to the issuance of a producer’s licence. To obtain an enhanced security clearance, these individuals would be required to submit an application with personal information and documents to Health Canada, so that checks and verifications of relevant files of law enforcement agencies could be conducted. As well as criminal record checks, these clearances would involve a global evaluation of the applicant’s potential associations with criminal or violent organizations, associations with individuals linked to such organizations, and the risk of whether the applicant might be induced to assist, abet or commit any acts that would pose a risk to the control of the production and distribution of cannabis. Should the applicant not successfully obtain a security clearance, the production licence would be refused.

Information sharing

The proposed MMPR include provisions that would require licensed producers to share information with appropriate authorities in certain circumstances. For example, as with the current MMAR, law enforcement needs a way to verify whether a named individual is a registered client of the producer. If a member of a Canadian police force requires information in the course of an investigation, a licensed producer would be required to confirm as soon as practicable whether the individual is a registered client or an individual who is responsible for a registered client and the daily quantity of dried marihuana specified in the medical document.

Record keeping

As described under the proposed MMPR, licensed producers would have to keep records of their activities with cannabis, including all transactions (sale, exportation, importation), all dried marihuana returned from clients, and an inventory of cannabis (e.g. seeds, fresh harvested marihuana, dried marihuana and packaged marihuana). All records would have to be kept for a period of at least two years, in a format that would be easily auditable, and would have to be made available to Health Canada upon request.

Regulatory and non-regulatory options considered

In addition to the proposed approach described above, the following options were considered.

Health Canada continues to authorize individuals to possess dried marihuana for medical purposes, but the current supply options would be replaced with licensed production by private industry.

Under this option, Health Canada would establish a licensing framework to allow for a commercial industry for the production and distribution of dried marihuana for medical purposes. Personal and designated production of dried marihuana for medical purposes would be eliminated, and Health Canada would no longer produce and distribute marihuana directly to individuals, eliminating related contract costs. However, Health Canada would continue to authorize individuals to possess dried marihuana for medical purposes. This would mean that individuals would have to apply to Health Canada for an authorization prior to registering as a client with a licensed producer. Health Canada would continue to issue authorization documents and maintain a database of all authorized persons.

This is not the preferred option because it is inconsistent with one of the key objectives of reform, which is to treat marihuana as much as possible like a medication. Furthermore, as the numbers of users of marihuana for medical purposes are expected to continue to grow, Health Canada would continue to incur high administrative costs by maintaining this role.

Status quo

Under this option, Health Canada would maintain the existing Program in its current form. Health Canada would continue to issue authorizations to possess, PUPLs and DPPLs to program applicants. In order to manage the expected growth in applications, Health Canada would have to review its administrative processes and its Program infrastructure to look for additional efficiencies. Given that the numbers of individuals in the Program continue to rise, costs for such a contract would also continue to rise on an annual basis.

Additionally, Health Canada could consider raising the price of dried marihuana to cover the actual cost of production and distribution.

Health Canada could also expand its capacity to inspect PUPLs and DPPLs. However, an effective inspection program for thousands of sites across the country would be costly. In addition, Health Canada’s inspectors would not be able to address public health, safety and security concerns expressed by stakeholders, such as electrical hazards, humidity and poor air quality in personal and designated production sites.

The status quo does not respond to stakeholder concerns about the health and safety risks of personal production. Also, as legal challenges against the current MMAR continue, and as the number of individuals entering the Program rises, Health Canada would face rising pressures that would be difficult to contain.

Benefits and costs

The cost-benefit analysis (CBA) was based on a projected scenario that represents the most likely outcome of the regulatory change. A sensitivity analysis of the results was undertaken for a range of key parameters to capture the effect of uncertainty for each variable used in the analysis of the estimated costs and benefits.

The study focused on the consumption of marihuana, obtained from legal sources of supply, for medical purposes. The broader issue of illicit market supply and use was considered to be outside the scope of the analysis.

Marihuana for medical purposes is not an approved therapeutic product and the scientific studies of its safety and efficacy are not conclusive. The CBA made no attempt to measure real or perceived health costs or benefits in terms of therapeutic effects or improvements to quality of life. Instead, the study relied on estimating purely economic impacts on the basis of a change in consumer surplus that could arise from the proposed MMPR.

Projected number of potential users

The number of persons using marihuana for medical purposes was projected over the 10-year forecast period, from 2014 to 2024, based on historical patterns of use under the current Program and an estimated upper limit. This limit represents the current number of people who indicate they use marihuana for medical purposes in the most recent (2011) population-level survey of Canadians aged 15 years and over.

Under both the status quo scenario and the proposed MMPR, the analysis assumed the historical growth rate in authorized users of approximately 40% per annum to continue over the policy impact period (2014–2024). Under the status quo scenario, the number of potential users of marihuana for medical purposes was projected to increase from a base number of 57 799 in 2014 to about 433 688 in 2024, slightly below the upper limit of 450 000. While the absolute number of legal users is still expected to increase over time, this increase was projected to be approximately 30% less over the 10-year period under the proposed MMPR compared to the status quo scenario. This would mean an increase from a low projected estimate of 41 384 in 2014 to approximately 308 755 users by the end of the 10th year of implementation.

Benefits

The analysis quantified and monetized the beneficial impacts of the proposed MMPR in terms of the reduction in risks associated with residential marihuana cultivation such as electrical fire hazards, potential home intrusions by criminals and the risks of sustaining serious injury or death in either case. Benefits were also estimated in terms of the economic efficiency impacts.

Reduction in residential fire risks

The focus on safety impacts was on the risk and consequence of residential fires resulting from faulty electrical wiring, overloading of electrical circuits, tampering with electrical usage monitoring and other electrical system malfunction arising from indoor marihuana cultivation. The analysis assumed that under the proposed MMPR, the risks of property damage, personal injury or death resulting from marihuana production-related fires would be significantly reduced but not completely eliminated. The social cost of adverse safety events related to the production of marihuana for medical purposes was estimated to be reduced, over the period from 2014 to 2024, by about 40% under the proposed MMPR, at a present value of $64.32 million. This represents annualized savings (avoided costs of property damage, injury and death from residential fires) of approximately $9.58 million per year for 10 years.

Reduction in risk of break-ins / home invasions

The focus of the security impacts was on the risk and consequences of home invasion, violence targeting residential production involved in misuse, and criminal activity related to marihuana distribution on the illegal market. Information from Canadian law enforcement authorities on misuse of production licences, home invasions and shootings was used as the basis to estimate the risk of violence. Overall, the analysis valued the projected reduction in the risks of break-ins / home invasions due to the proposed MMPR at $0.38 million in 2014, rising to $26.48 million in 2024. The present value of security cost-savings under the proposed MMPR was estimated at approximately $89.03 million over the policy impact period, with an average annualized value of $13.27 million. The proposed MMPR would have lower security costs (over 40% lower than under the status quo) due to the reduction in misuse activity that results from the expectation that eliminating personal and designated production in favour of a commercial licensing scheme would deter individuals interested in exploiting the Program.

Program administration cost savings

Government administration costs of the current Program have increased significantly as the number of Program participants has grown. In the absence of the proposed regulatory changes, the analysis assumed a continuation of the growth in Program applications and corresponding substantial increases in the cost to Health Canada to authorize legal possession and license production of marihuana for medical purposes. The CBA estimated that the administration cost of the current Program would increase from $20.63 million in 2014 to over $120 million in 2024, in the absence of any changes. These costs include salary, employee benefits and accommodation costs associated with dedicated staff, operations and maintenance costs, training, supplies and other corporate overhead costs.

Under the proposed MMPR, Health Canada would eliminate the role it plays in determining the eligibility of persons to access a legal supply of marihuana for medical purposes and return to its traditional role as a regulator of industry. This results in significant administrative cost savings over the policy impact period. Under the scenario assumed for the new regulated market, the regulatory proposal was estimated to lead to more than a 90% reduction in Health Canada’s administrative expenditures. The present value of administration costs savings over 10 years was estimated at $478 million. On average, the proposed MMPR would generate administrative cost savings of approximately $71.24 million per year over this period. (This estimate does not include potential savings in contract supply costs or subsidies.)

The proposed MMPR would establish a regulated commercial market for the production and sale of marihuana for medical purposes. Private industry participation in the proposed regime is expected to yield benefits to society. Under the status quo, marihuana is either produced through private arrangements or at a cost to the taxpayer. There were no benefits to society at large beyond the benefits to the individuals involved. Under the proposed MMPR, there would be beneficial impacts for the industry, over and above the benefits to the individuals involved in the market. The analysis measured this change in welfare by estimating a change in producer surplus gains under the proposed policy. No producer surplus is derived in the status quo. The CBA found that the new regulated market would generate an overall producer surplus of $2.64 million in the first year of implementation (2014–15), rising to about $110 million in 2024 as the market expands. The present value of producer surplus gains over the policy horizon (2014–24) was estimated at $339.85 million or about $50.65 million (annualized average) per year for 10 years.

The CBA also estimated the deadweight loss under the current marihuana access regime from the effective subsidy to supply that resulted in excess demand relative to what a market equilibrium quantity would be. The value of this economic efficiency loss was relatively small as the Government supply component in the CBA model was comparatively small. The analysis assumes the imposition and payment of the regular consumption tax (HST) by consumers of marihuana under the proposed framework. Both the presence of an effective subsidy in the Government supply market for the status quo and the assumed, potential imposition of tax on purchases in the commercial market were projected to cause welfare losses to society by distorting market signals and causing sub-optimal allocation of scarce resources.

The economic efficiency loss under the status quo was estimated to be reduced by about $1.51 million during the first year of implementation (2014) of the proposed MMPR, rising to about $7.70 million in 2024. This represents an average annualized reduction of about $5.03 million or a total present value of approximately $33.74 million over 10 years. Overall, the reduction in deadweight loss is small and not a significant benefit of the regulatory change.

In total, the present value of benefits of the proposed MMPR was estimated to be $1.005 billion from 2014 to 2024. On average, this represents an annualized savings of approximately $149.77 million each year for 10 years.

Costs

The CBA projected the negative impacts of the proposed MMPR on social welfare on the basis of a change in the welfare of the individuals most directly affected by the regulatory change. Because the available scientific evidence does not conclusively support the use of dried marihuana for therapeutic purposes, the causal relationships between the use of the substance and purported medical benefits are inconclusive. Thus, the analysis measures the change in individual welfare under the policy directly by estimating the change in users’ consumer surplus. Economic theory does not require the existence of scientifically proven medical benefit in order to measure the welfare implications of a public policy change. The observation that some in society are willing to pay to obtain marihuana for medical reasons was deemed as a sufficient basis for measuring a change in consumer welfare.

Consumer surplus was estimated as the area under the demand curve and above the price consumers would potentially pay for marihuana under the proposed MMPR. Under the proposed MMPR, the analysis projected a reduction in the number of legal marihuana users vis-à-vis the status quo, and a reduction in the quantity consumed due to a potential increase in the price of marihuana in the regulated market. Under this scenario, the CBA predicted a significant loss of consumer surplus from this policy change. The analysis assumes a price change from about $7.60 per gram to about $8.80 per gram over the 10-year period. This assumption reflects the potentially higher cost of producing marihuana in the new commercial market, compared to personal or designated production under the current MMAR. The higher price also reflects the potentially higher product quality due to quality control measures to limit contaminants and toxic substances and to ensure a product of consistent quality over time. The analysis assumes that this projected price change would lead to a decrease in the relative number of legal users by about 30% over the next 10 years compared to the status quo. The total quantity of marihuana consumed was also estimated to decrease. On average, the loss in consumer surplus (representing the total social costs of the proposed MMPR) was estimated to be about –$166 million per year. The present value over 10 years was estimated to be about $1.115 billion. (The study did not estimate consumer surplus for any consumption derived from illicit supply sources).

Business compliance costs

Business compliance costs were estimated as 10% of overall supply cost. Based on this, the CBA estimated that business compliance costs would be about double under the proposed MMPR. As business compliance costs are incorporated in the supply cost for both the status quo and policy cases, they do not form part of the CBA. The business compliance costs mostly fall on medium and large businesses (as opposed to smaller businesses) as the scale of licensed producer activity (in terms of employees and sales revenue) is expected to grow beyond that of a small business after two years.

Net benefits

The scenario representing the most likely outcome of the cost-benefit model was the focus of the quantified results for estimating the present value of the net benefits of the regulatory proposal. The estimated net present value (NPV) was –$109.7 million, with an annualized value of –$16.35 million. This represents an overall net loss to society due solely to a reduction in consumer surplus.

This loss in consumer surplus results from reduced relative growth in consumption and a higher supply price due mostly to the shift from cheaper home production to a commercial market with appropriate regulatory controls and oversight.

A full assessment of the sensitivity of the NPV to all key variables was undertaken using Monte Carlo probabilistic methods. The results showed that there was substantial variability in the estimate (range: –$26 billion to +$10 billion; mean: –$1,688 million).

The status quo scenario was modeled on the assumption that Government resources required to administer the current Program would continue to grow over time to fully accommodate the required Program uptake in terms of numbers of persons wanting to access a legal source of marihuana for medical purposes. The Program administration cost was projected to increase from $13.8 million (FY 2013–14) to over $120 million (FY 2023–24). In reality, it is highly unlikely that such additional resources would be available to accommodate the forecast increase in Program participation in an era of fiscal restraint.

This qualification is useful when interpreting the overall results. The impact of a resource constraint was analyzed using a simulation model. The simulation results indicated that the number of authorizations to possess in a constrained status quo scenario might be only one-third of in the unconstrained case (i.e. perhaps only 150 000 authorizations to possess could be accommodated in the current Program over the forecast period in practice, compared with the assumed unconstrained growth of up to 450 000 users).

Non-quantified benefits

Not all significant impacts of the proposed MMPR were included in the quantitative results presented above. A few of these potential impacts were not quantified due to insufficient data on which to base estimates. Others were felt to be smaller in magnitude than the costs and benefits which were estimated. Nonetheless, some were considered to be substantial over the longer term but were excluded from the quantitative analysis because they were considered highly contingent on a number of economic, social and regulatory factors and would likely start to be measurable only near the end of, or after, the 10-year projection period assumed for the quantified CBA.

These impacts were assessed qualitatively. Major attention was given to (i) additional safety and security issues, impacts and possible benefits; (ii) reductions in information, administration and other transactions costs for users, the medical community and other stakeholders; (iii) the possible longer-term benefits from the full establishment of a large, competitive and innovative legal industry for marihuana users, the economy and Canadian society; and (iv) the longer-term possibility that a fully functioning and reasonably competitive, efficient and innovative market would promote increased uptake by individuals currently accessing marihuana through the illicit market.

The results of the qualitative analysis showed potentially highly beneficial effects. The results of the qualitative assessment are included in the full CBA report, which is available upon request.

Participants in MMAP: Reduced risk of illness due to mould caused by improper growing methods. Continued access to marihuana for medical purposes. Better-quality product, on average. Treatment is driven by relationship with authorized health care practitioners instead of Health Canada.

Non-participants in MMAP: Potential availability of more data on impact of use of marihuana for medical purposes due to possible licensed producers (LP) R&D investments.

Government: Reduced criminal activity in residential areas due to banning of legal marihuana production. Property taxes / local jobs for areas with LPs in their jurisdiction.

Note: Policy impact period from 2014 to 2024, assumed social discount rate of 8%.

Impacts on economy, businesses and consumers

Government, and ultimately, the Canadian taxpayer, are the main beneficiaries of regulatory change through the reduction in Program administration costs. Business, especially medium-sized business, is also a beneficiary in terms of producer surplus benefits and the expansion of the legal marihuana supply industry that could grow to more than $1.3 billion per year in annual sales by the end of the forecast period. It is important to note that producer surplus is not related to profitability and should not be taken as an indicator of profitability.

Users of a legal source of marihuana for medical purposes are the stakeholder group that is impacted in terms of the reduced consumer surplus. The general public, in contrast, benefits slightly in terms of reduced deadweight loss and the reduced safety costs which would be borne through residential insurance.

The principal impact on the economy would be the replacement of the current regime — a combination of personal production by private citizens and a heavily subsidized Government supply option — by a commercial industry. This would significantly reduce the burden on the Government of Canada and Canadian taxpayers. By 2024, rather than attempting to regulate potentially up to 450 000 individuals, Health Canada would likely be dealing with a significantly smaller number of licensed businesses.

It is projected that within one to two years of the industry’s establishment, licensed producers would have grown beyond the scope of small business. While there would be substantial investments required at the start-up phase, returns supported by a growing industry could potentially compensate owners of capital in a relatively short time.

Much of the societal risk and burden created by the current MMAR are created from the indirect impacts of allowing individuals to produce marihuana at home. By shifting the production of marihuana for medical purposes from seldom-inspected private homes to more rigorously regulated, secure licensed producers, these impacts would be significantly reduced or altogether eliminated.

Additionally, there is a significant impact on “enforcement clarity” for law enforcement. Since producing marihuana for medical purposes in private dwellings is legal under the existing regime, police have sometimes expressed difficulty investigating suspected illicit production sites operating under the cover of a licence. Under the proposed MMPR, all home production of marihuana would be illegal and only licensed producers would be authorized for legal production.

Health Canada anticipates that the current social ills caused by home production of marihuana for medical purposes would increase if the current Program continues. Due to the rapid growth of the Program, the adverse consequences produced by the existing Program will only compound over time. The existing Program participant base has been difficult to monitor and regulate effectively, and exponential growth will make it more so. The proposed MMPR are designed to minimize the detrimental impacts of the current MMAR.

Moreover, with commercial entities cultivating marihuana for medical purposes, it is reasonable to expect that resources would be invested in improving the quality of the product and in researching the effects of marihuana. This could result in a growing body of scientific information that could advance society’s knowledge about uses of the plant.

Impacts by region

Several regions would have negative overall impacts because they have a high concentration of Program usage; thus, they have disproportionate shares of consumer surplus reduction. These regions are British Columbia and the Atlantic (primarily Nova Scotia). Other regions would have positive overall impacts. Savings from lower administrative costs would positively impact Ontario, because the Program is largely administered from Ontario. It would also positively impact the Prairie region because that is where government-contracted marihuana production occurs.

“One-for-One” Rule

While the proposed MMPR could impose administrative burden costs on business, they would be exempted from the One-for-One Rule because they are addressing unique and exceptional circumstances. Canadian courts have found that individuals who have demonstrated a medical need for marihuana have a right under the Charter to reasonable access to a legal source of marihuana for medical purposes. Therefore, the Government must establish a legal framework which provides access to this controlled substance.

According to the United Nations World Drug Report, marihuana is the most trafficked illicit drug in North America. The Royal Canadian Mounted Police (RCMP) estimates that the illegal marihuana market in Canada alone represents a multi-billion dollar per year industry. Because marihuana is a highly divertible controlled substance, and given that all controlled substances must be tracked and reported internationally, some administrative burden is justified. Security measures therefore account for a large portion of the administrative burden on industry in the proposed MMPR. These measures are included to address the risks to public health, safety and security that are associated with marihuana production.

Additionally, as there is no licit Canadian industry for the production of marihuana for medical purposes, the proposed MMPR set out a scheme which interested individuals or corporations could elect to participate in or not — it would not place an administrative burden on any existing business activities.

Small business lens

The proposed MMPR would enable an entirely new industry to be created in Canada. There are therefore no incumbent firms directly affected by the regulatory change.

Achieving the benefits contemplated by the proposed MMPR is highly dependent on establishing a viable marihuana for medical purposes industry, with licensed producers that produce as the anticipated demand for the product increases. Based on consultations to date, it appears that all entities contemplating entry into the new market would currently qualify as small businesses. Small businesses typically have less capacity to make the investments required to comply with regulatory requirements; therefore, their viability could be disproportionately affected. The proposed MMPR, therefore, have been designed to minimize compliance and administrative burden to the greatest extent possible, based on the feedback received from potential licence applicants. The MMPR account for the need to maintain reasonable safeguards against the risks of illegal diversion of the product, entry into the market by criminal elements, and the ability of the Government to detect potential misuse of the system by users.

The impact of the regulatory burden on small businesses, however, is expected to be transitory. Projections indicate that, due to the significant size of the potential legal market, within two years of implementation, competent licensed producers could earn returns that can compensate for the initial outlay on regulatory-related and other start-up costs, and could also potentially have experienced growth in their businesses to no longer be designated small businesses.

Regulatory flexibility analysis statement

According to Health Canada’s analysis using the Regulatory Cost Calculator, the two most significant cost drivers for businesses under the proposed MMPR are “equipment” (included in compliance cost) and “record keeping” (administrative costs). Equipment costs include security-related expenditures required by the proposed MMPR.

Security-related costs were the most important equipment-related costs contributing to the business compliance burden. These costs include securing production facilities from external threats, installation and operation of surveillance systems, personnel access control and ongoing site monitoring to prevent unlawful access.

In general, the security of the entire regulated supply system from infiltration by criminals or from abuse and exploitation was considered by far the greatest risk faced by the new regime. Thus, the initial option considered proposed stringent, prescriptive requirements and controls around production, sale and distribution of marihuana as the way to mitigate these risks. However, these requirements were eventually rejected in favour of greater supply flexibility and a performance-based production security standard which achieves the same objectives but minimizes the compliance burden on potential businesses. The original option estimated compliance costs based on the prescriptive requirements. The flexible option assumes that small businesses would tailor their compliance costs in a more efficient way to meet the performance standards outlined in the proposed MMPR.

Similarly, costs associated with maintaining and reporting activities with marihuana were the most significant administrative cost identified in the Department’s analysis. As part of the options considered for LPs to track and maintain a record of their activities, the initial option considered requiring a centralized reporting and patient tracking database system to further mitigate the risks of diversion and abuse. This would have entailed a corresponding investment in IT infrastructure and high maintenance and operational costs to be incurred by all LPs. The initial option cost estimate is higher partly because of the higher administrative burden imposed by this requirement. The proposed MMPR, conversely, include record-keeping costs associated only with patient registration and the supply of orders. This does not include any capital, maintenance or other operational expenditures related to record-keeping or other tracking systems since none is specifically imposed by the proposed MMPR. The flexible option, therefore, has lower business administrative costs.

Another provision made to ensure regulatory flexibility for businesses is the requirement under the flexible option for LP licences to be renewed up to every three years as opposed to annually, as considered under the initial option.

Finally, the above consideration notwithstanding, the recommended flexible option may still appear to be imposing heavy compliance and administrative burdens on potential small business LP, upon closer examination. However, it should be noted that the requirements included in the proposed MMPR are considered necessary to achieving the goal of reducing the potential for abuse and exploitation of the proposed system and reducing the risks to public safety and security, while still maintaining access to marihuana for medical purposes for Canadians with medical need.

Balances the need to control the risks of diversion and the risks to safety and security of the public with the need to encourage private sector participation by reducing start-up and overall costs of doing business in a new regulated market

Note: Costs have been estimated using the Standard Cost Model. Detailed calculations are available upon request.

The flexible option is recommended. Please see Annex A for the small business lens checklist.

Consultation

Following the announcement of the proposed changes to the Program by the Minister of Health on June 17, 2011 (the original proposal), a consultation document was posted on the Health Canada Web site and a 45-day public consultation was launched. Health Canada also organized targeted stakeholder consultations between August and November 2011 to gather comments on the proposed improvements to the Program. In addition, Health Canada has notified the United States Drug Enforcement Administration and the International Narcotics Control Board that a new program is under consideration wherein individuals would no longer be licensed to produce their own marihuana and supply would come from licensed producers.

A detailed summary of these consultations was published in June 2012. Most stakeholder groups welcomed Health Canada’s efforts to create a regulated industry. In particular, law enforcement, municipal governments and fire officials were supportive of the plans to eliminate personal and designated production in dwellings and to establish a commercial market. A large number of entities expressed an interest in becoming licensed to produce under the proposed regulatory framework. Program participants, however, indicated that they did not want to give up the ability to produce their own marihuana, and expressed concerns that they would face higher costs for marihuana for medical purposes in the future. The medical community voiced its continued concerns with the lack of scientific evidence regarding the use of marihuana for medical purposes.

Rationale

In recent years, a wide range of stakeholders have voiced concerns about the MMAP. Concerns include the risk of diversion of marihuana, the complexity and timeliness of the application and authorization process, health, safety and security issues associated with the production of marihuana in homes and communities, and the lack of adequate scientific evidence for the medical use of marihuana. A new regulatory framework is required to address these and other issues by providing an effective means of access to marihuana for medical purposes while continuing to regulate marihuana as a controlled substance.

The proposed MMPR would impose a significant compliance and administrative burden on businesses that may wish to enter the proposed market. However, the requirements included in the proposed MMPR are considered necessary to achieving the goal of reducing the potential for abuse and exploitation of the proposed system and reducing the risks to public health, safety and security, while still maintaining reasonable access to a legal source of marihuana for medical purposes, as per the decisions of Canadian courts, for Canadians with medical need.

The proposed MMPR would provide a more efficient way of accessing marihuana for medical purposes, particularly by affording individuals with medical need increased choice in terms of authorized health care practitioners, marihuana strains, and suppliers. Eliminating licensed marihuana production in homes would eliminate public health, safety and security concerns relating to those licensed activities, as well as eliminate ambiguities for law enforcement. Finally, the elimination of Health Canada’s role in authorizing individual access to marihuana for medical purposes, and production and distribution of marihuana, would significantly reduce the cost of administering the current Program.

Implementation, enforcement and service standards

Repeal of the MMAR

The proposed MMPR include a number of consequential changes to the MMAR, as well as two transitional registration schemes that would allow for gradual transition to the new regulatory regime. Upon coming into force, the proposed MMPR would allow the holder of an authorization to possess to obtain their supply of marihuana from a licensed producer by registering as a client with that producer. Similarly, an individual who had obtained a medical declaration from their medical practitioner under the MMAR could register as a client with a licensed producer instead of applying to Health Canada for an authorization to possess.

The MMAR would be repealed on March 31, 2014. At that point, all authorizations and licences issued under the MMAR would no longer be valid. However, individuals would be authorized to use their expired authorizations to possess to register as a client with a licensed producer for up to one year after their date of issue, unless a period of usage of less than 12 months has been indicated in the medical declaration.

New PUPL and DPPL would no longer be issued if the application is submitted after September 30, 2013. Similarly, existing PUPL and DPPL holders would not be able to change the location of their production site on the licence as of the same date. This is to avoid situations where a person receives a PUPL or DPPL as their supply option, but would not be able to produce a crop before the repeal of the MMAR.

Compliance and enforcement

In general, compliance and enforcement activities would be subject to the broader Health Canada compliance and enforcement policy for controlled substances and precursors. Compliance verification would largely take the form of pre-licensing inspections, and inspections of licensed sites. Inspections would occur under existing legislative authorities. Compliance would be assessed against the proposed MMPR, the FDA, the NCR, and, during transition, the MMAR, as well as any relevant directives and guidelines. Potential responses to non-compliance could include placing conditions on a licence, the full or partial suspension of a licence, the revocation of a licence or permit, and the refusal to issue, amend, or renew a licence, or prosecution under the CDSA or FDA.

Performance measurement and evaluation

Health Canada has developed a Performance Measurement and Evaluation Plan (PMEP) to measure the performance and conduct an evaluation of the proposed MMPR. This plan specifies the methods selected for ongoing monitoring of the proposed MMPR, performance targets, indicators and data sources. These would be comprehensively tracked as part of the performance measurement strategy outlined in the PMEP. This PMEP is available upon request.

Annex A: Small Business Lens Checklist

Small business lens checklist

3. Is the checklist submitted with a RIAS for the Canada Gazette, Part Ⅰ or Part Ⅱ?

Note: Checklists should be submitted to TBS-RAS along with the RIAS for the Canada Gazette, Part Ⅰ, when seeking TBS-RAS approval. If the small business lens is applicable to a proposal that is exempted from prepublication in the Canada Gazette, the checklist is to be submitted along with the RIAS for publication in the Canada Gazette, Part Ⅱ.

Canada Gazette, Part Ⅰ

Canada Gazette, Part Ⅱ

4. Date finalized copy received by TBS-RAS (DD/MM/YYYY): 01/10/2012

If the answer to any of the questions is no or N/A, please include a short justification in the box below the question.

A. Small business regulatory design

Small business lens checklist section A

I

Communication and transparency

Yes

No

N/A

1.

Are the proposed regulations or requirements easily understandable in everyday language?

Text in the MMPR has been drafted to be as clear as possible. However, the MMPR would establish a brand new commercial industry producing a controlled substance. As such, these Regulations are complex, since they regulate both how marihuana is to be produced, how consumers access marihuana, and security and record-keeping requirements which allow Health Canada to report to international agencies and to perform compliance and enforcement activities with the aim of preventing diversion of marihuana to the illicit market. Participants in this market may not have had any experience in operating in a regulated industry before, and therefore, there may still be some challenges for them in understanding the requirements. Where possible, however, plain language guidance documents are being developed in order to clearly communicate what is required from businesses.

2.

Is there a clear connection between the requirements and the purpose (or intent) of the proposed regulations?

As described in the RIAS, and as also previously communicated in public consultations, there are clear reasons for the regulatory change which is being made.

3.

Will there be an implementation plan that includes communications and compliance promotion activities, that informs small business of a regulatory change and guides them on how to comply with it (information sessions, sample assessments, toolkits, Web sites, etc.)?

As these Regulations create a brand new industry, an extensive communication plan has been developed for program participants and potential license holders. The marihuana for medical purposes section of the Health Canada Web site is being revised to be clearer, and to make information for all stakeholders easier to find. Guidance documents for specific technical requirements of the Regulations are in development and would be ready by the time the Regulations are fully in force.

4.

If new forms, reports or processes are introduced, are they consistent in appearance and format with other relevant government forms, reports or processes?

Many of the processes and documents for licensed producers would be analogous to current processes and documents used for other regulated parties who conduct activities with controlled substances. As much as possible, the marihuana-related documentation would be similar to what already exists.

II

Simplification and streamlining

Yes

No

N/A

1.

Will streamlined processes be put in place (e.g. through BizTalk, Canada Border Services Agency single window) to collect information from small businesses where possible?

Electronic systems are currently in development, with proposed implementation in spring 2014. Links between the Office of Controlled Substances and other applicable processes are being explored currently.

2.

Have opportunities to align with other obligations imposed on business by federal, provincial, municipal or international or multinational regulatory bodies been assessed?

MMPR regulatory requirements for authorized health care practitioners and pharmacists align with those already in place for similar activities conducted under the NCR. Where possible, rather than develop unique requirements under the MMPR, other existing obligations have been considered. As an example, rather than specifying zoning requirements for the location of sites where marihuana is to be produced in the MMPR, only municipal by-laws governing location would apply.

3.

Has the impact of the proposed regulations on international or interprovincial trade been assessed?

Health Canada has consulted with the Department of Foreign Affairs and International Trade regarding international obligations. Mechanisms for import and export have been included in the proposed MMPR.

4.

If the data or information, other than personal information, required to comply with the proposed regulations is already collected by another department or jurisdiction, will this information be obtained from that department or jurisdiction instead of requesting the same information from small businesses or other stakeholders? (The collection, retention, use, disclosure and disposal of personal information are all subject to the requirements of the Privacy Act. Any questions with respect to compliance with the Privacy Act should be referred to the department’s or agency’s ATIP office or legal services unit.)

As this is a new industry and new regulatory scheme, the information required is not collected by any other department or jurisdiction.

5.

Will forms be pre-populated with information or data already available to the department to reduce the time and cost necessary to complete them? (Example: When a business completes an online application for a licence, upon entering an identifier or a name, the system pre-populates the application with the applicant’s personal particulars such as contact information, date, etc. when that information is already available to the department.)

This information would not be available to the Department on initial license application from a business. However, this would be possible when licenses are renewed.

6.

Will electronic reporting and data collection be used, including electronic validation and confirmation of receipt of reports where appropriate?

Electronic systems are currently in development, with proposed implementation in spring 2014.

7.

Will reporting, if required by the proposed regulations, be aligned with generally used business processes or international standards if possible?

This is a unique regulatory scheme and a brand new industry for which there are no domestic or international equivalents.

8.

If additional forms are required, can they be streamlined with existing forms that must be completed for other government information requirements?

This is a unique regulatory scheme which does not overlap with other government programs.

III

Implementation, compliance and service standards

Yes

No

N/A

1.

Has consideration been given to small businesses in remote areas, with special consideration to those that do not have access to high-speed (broadband) Internet?

The proposed Regulations have been drafted to provide flexibility for all involved businesses. A key activity for the industry would be reporting transactions and activities with forms of marihuana. The Regulations do not specify that these data need to be reported electronically, and so there are other means of reporting for businesses without broadband.

2.

If regulatory authorizations (e.g. licences, permits or certifications) are introduced, will service standards addressing timeliness of decision making be developed that are inclusive of complaints about poor service?

Service standards for licensing and other activities would be developed. As this is a new industry and a new regulatory scheme, the Department would need to reassess these standards after an initial period of time to ensure that they are reasonable. This reassessment would also address any complaints received, and make corresponding adjustments.

3.

Is there a clearly identified contact point or help desk for small businesses and other stakeholders?

The Office of Controlled Substances in the Health Environments and Consumer Safety Branch of Health Canada would be clearly identified as the single point of contact for stakeholders in all materials.

B. Regulatory flexibility analysis and reverse onus

Small business lens checklist section B

IV

Regulatory flexibility analysis

Yes

No

N/A

1.

Does the RIAS identify at least one flexible option that has lower compliance or administrative costs for small businesses in the small business lens section?

Examples of flexible options to minimize costs are as follows:

Longer time periods to comply with the requirements, longer transition periods or temporary exemptions;

Performance-based standards;

Partial or complete exemptions from compliance, especially for firms that have good track records (legal advice should be sought when considering such an option);

Reduced compliance costs;

Reduced fees or other charges or penalties;

Use of market incentives;

A range of options to comply with requirements, including lower-cost options;

Simplified and less frequent reporting obligations and inspections; and

Licences granted on a permanent basis or renewed less frequently.

Regulatory compliance flexibility is provided for all businesses in the design of the proposed MMPR. As an example, while the type of information to be kept in records has been defined by the proposed MMPR, how that information is to be stored and processed was not specified, other than it be in a form that is auditable. Another example comes from the physical security requirements for the site where marihuana is grown, which are outcome-based (e.g. prevent unauthorized access), rather than prescriptive (e.g. build a 3 m high concrete wall).

2.

Does the RIAS include, as part of the Regulatory Flexibility Analysis Statement, quantified and monetized compliance and administrative costs for small businesses associated with the initial option assessed, as well as the flexible, lower-cost option?

Use the Regulatory Cost Calculator to quantify and monetize administrative and compliance costs and include the completed calculator in your submission to TBS-RAS.

The RIAS presents an analysis of options.

3.

Does the RIAS include, as part of the Regulatory Flexibility Analysis Statement, a consideration of the risks associated with the flexible option? (Minimizing administrative or compliance costs for small business cannot be at the expense of greater health, security, safety or environmental risks for Canadians.)

The proposed MMPR primarily address public health, safety and security concerns with the current marihuana medical access program. As a result, flexibility has only been considered when it did not conflict with this goal.

4.

Does the RIAS include a summary of feedback provided by small business during consultations?

Since the proposed MMPR establish a new legal industry, there are currently no existing, legal commercial businesses producing marihuana for medical purposes in Canada, with the exception of the single producer which grows under contract for the Government. However, potential licensed producers, comprising mostly of interested individuals, were consulted as part of the nation-wide consultations undertaken prior to regulatory development. Their feedback has been publicly released and a summary is also included in the RIAS.

V

Reverse onus

Yes

No

N/A

1.

If the recommended option is not the lower-cost option for small business in terms of administrative or compliance costs, is a reasonable justification provided in the RIAS?

The recommended option is the lower cost alternative based on an evaluation of the options considered.

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council, pursuant to subsection 55(1) of the Controlled Drugs and Substances Act (see footnote a), proposes to make the annexed Marihuana for Medical Purposes Regulations.

Interested persons may make representations concerning the proposed Regulations within 75 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part Ⅰ, and the date of publication of this notice, and be addressed to the Bureau of Medical Marihuana Regulatory Reform, Controlled Substances and Tobacco Directorate, Healthy Environments and Consumer Safety Branch, Health Canada, Address Locator: AL3503D, Ottawa, Ontario K1A 0K9 (fax: 613-941-7240; email: consultations-marihuana@hc-sc.gc.ca).

Ottawa, December 6, 2012

JURICA ČAPKUNAssistant Clerk of the Privy Council

TABLE OF CONTENTS

(This table is not part of the Regulations.)

MARIHUANA FOR MEDICAL PURPOSES REGULATIONS

INTERPRETATION

1. Definitions

2. Application of Narcotic Control Regulations

POSSESSION

3. Obtaining dried marihuana or cannabis

4. Possession limit — medical document

GENERAL PROVISIONS

5. Dried marihuana

6. Notice of refusal or revocation

7. Further information

8. Inspection of site

9. Police enforcement

10. Alteration of documents

PART 1

LICENSED PRODUCERS

DIVISION 1

PERMITTED ACTIVITIES AND GENERAL OBLIGATIONS

11. Activities

12. Dwelling-place

13. Indoor activities only

14. Indoor storage only

15. Identification of licensed producer

16. Alteration of medical document

17. Responsible person in charge present

18. Safekeeping during transportation

19. Report of loss or theft

20. Destruction

DIVISION 2

LICENSING

21. Eligible persons

22. Senior person in charge and responsible person in charge

23. Notice to local authorities

24. Application for licence

25. Security clearance required

26. Issuance of licence

27. Grounds for refusal

28. Period of validity

29. Application for renewal

30. Application for amendment

31. Notice to local authorities

32. Notice to Minister — change of personnel

33. Notice to Minister — various changes

34. Statement by signatory of notice

35. Revocation — lost or stolen licence

36. Revocation — notice of cessation of activities

37. Revocation — other grounds

38. Suspension

DIVISION 3

SECURITY MEASURES

General

39. Compliance with security measures

40. Unauthorized access

Restricted Areas

41. Restricted access

42. Visual monitoring

43. Intrusion detection system

44. Filtration of exhaust air

Site

45. Visual monitoring

46. Intrusion detection system

DIVISION 4

GOOD PRODUCTION PRACTICES

47. Prohibition — sale or provision

48. Microbial and chemical content

49. Premises

50. Equipment

51. Sanitation program

52. Standard operating procedures

53. Recall

54. Quality assurance

55. Lot or batch samples

56. Recall reporting

57. Adverse reactions

DIVISION 5

PACKAGING, LABELLING AND SHIPPING

58. Packaging

59. Weight of dried marihuana

60. Product label

61. Client label

62. Combined label

63. Department of Health document

64. Presentation of information — label

65. Expiry date

66. Reference to Acts or regulations

67. Shipping

DIVISION 6

IMPORT AND EXPORT

68. Application for import permit

69. Issuance of import permit

70. Refusal to issue import permit

71. Provision of copy of import permit

72. Declaration after release from customs

73. Revocation of import permit

74. Suspension of import permit

75. Application for export permit

76. Issuance of export permit

77. Refusal to issue export permit

78. Provision of copy of permit

79. Declaration after export

80. Revocation of export permit

81. Suspension of export permit

DIVISION 7

SECURITY CLEARANCES

82. Eligibility

83. Application for security clearance

84. Checks and verifications

85. Minister’s decisions

86. Outstanding criminal charge

87. Refusal to grant security clearance

88. Validity period

89. Security clearance no longer required

90. Suspension of security clearance

91. New applications

92. Sending of notices by Minister

93. False or misleading information

DIVISION 8

COMMUNICATION OF INFORMATION

94. Information concerning registered clients

95. Information concerning health care practitioners

96. Information concerning licensed producers

97. Information concerning import or export permit

98. Providing information to foreign organizations

99. Receiving of information by Minister

100. Security clearance — Minister

101. Security clearance — law enforcement agency

PART 2

REGISTRATION AND ORDERING

REGISTRATION

102. Eligibility

103. Registration application

104. Health care practitioner’s consent to receive dried marihuana

105. Verification of medical document

106. Registration of client

107. Expiry of registration

108. Refusal to register

109. Notice — refusal to register

110. Cancellation of registration

111. Application to amend registration

112. Amendment

113. Refusal to amend

114. Prohibition — transfer of medical document

NEW MEDICAL DOCUMENT

115. New application

116. Applicable provisions

PROCESSING AN ORDER

117. Order required

118. Shipping

119. Refusal

120. 30-day limit — registered client

PART 3

REGISTERED CLIENTS AND OTHER AUTHORIZED USERS

121. Proof of authority to possess

122. Prohibition — obtaining from more than one source

123. Return

PART 4

HEALTH CARE PRACTITIONERS

124. Authorized activities

125. Medical document

126. Labelling of dried marihuana

127. 30-day limit

PART 5

SALE OR PROVISION BY A LICENSED PRODUCER
TO A PERSON OTHER THAN A REGISTERED CLIENT

“medical practitioner” means a person who is registered and entitled under the laws of a province to practise medicine in that province and is not named in a notice issued under section 59 of the Narcotic Control Regulations.

“nurse practitioner”
« infirmier praticien »

“nurse practitioner” means a nurse practitioner within the meaning of section 1 of the New Classes of Practitioners Regulations who is permitted to prescribe dried marihuana in their practice under the laws of the province in which they are registered and entitled to practise and who is not named in a notice issued under section 59 of the Narcotic Control Regulations.

“pharmacist”
« pharmacien »

“pharmacist” means a pharmacist within the meaning of section 2 of the Narcotic Control Regulations who is not named in a notice issued under section 48 of those Regulations.

“registered client”
« client inscrit »

“registered client” means a person who is registered as a client with a licensed producer under section 106.

“responsible person in charge”
« personne responsable »

“responsible person in charge” means, for the purpose of Part 1, the person designated under paragraph 22(1)(b).

“restricted area”
« zone à accès restreint »

“restricted area” means an area within a site where cannabis is present.

“security clearance”
« habilitation de sécurité »

“security clearance” means a security clearance granted by the Minister under section 85.

“Security Directive”
« Directive en matière de sécurité »

“Security Directive” means the Directive on Physical Security Requirements for Controlled Substances (Security Requirements for the Storage of Controlled Substances) published by the Department of Health, as amended from time to time.

“serious adverse reaction” means a noxious and unintended response to dried marihuana that requires in-patient hospitalization or a prolongation of existing hospitalization, that causes congenital malformation, that results in persistent or significant disability or incapacity, that is life threatening or that results in death.

“site”
« installation »

“site” means

(a) a building or a place in a building used by a licensed producer; or

(b) an area occupied exclusively by buildings used by a licensed producer.

Destruction

(2) For the purpose of these Regulations, cannabis is destroyed when it is altered or denatured to such an extent that its consumption is rendered impossible or improbable.

Drying

(3) For the purpose of these Regulations, the production of marihuana includes the drying of it.

Application of Narcotic Control Regulations

2. For greater certainty, except in the case of inconsistency with these Regulations, the provisions of the Narcotic Control Regulations also apply to cannabis referred to in these Regulations.

POSSESSION

Obtaining dried marihuana or cannabis

3. (1) A person listed in subsection (2) may possess dried marihuana and a person listed in subsection (3) may possess cannabis if the person has obtained it

(a) in accordance with these Regulations;

(b) in the course of activities performed in connection with the enforcement or administration of any Act or its regulations; or

(c) from a person who is exempt under section 56 of the Act from the application of subsection 5(1) of the Act with respect to the dried marihuana or cannabis.

Possession — dried marihuana

(2) The following persons may possess dried marihuana:

(a) a person who has obtained the dried marihuana for their own medical purposes or for those of another person for whom they are responsible

(i) from a licensed producer or a pharmacist, in accordance with a medical document, or

(ii) from a health care practitioner in the course of treatment for a medical condition;

(b) a person who requires dried marihuana for their profession and is

(i) a pharmacist who is registered and entitled to practise pharmacy and to operate a pharmacy or dispensary in the province in which they have that possession, or

(ii) a health care practitioner who is registered and entitled to practise in the province in which they have that possession; or

(c) a hospital employee, if the possession of dried marihuana is for the purposes of and in connection with their employment.

Possession — cannabis

(3) The following persons may possess cannabis:

(a) a person who requires cannabis for their business as a licensed producer or licensed dealer;

(b) a person who is employed as an inspector, an analyst, a peace officer, a member of the Royal Canadian Mounted Police or a member of the technical or scientific staff of a department of the government of Canada or of a province and who possesses the cannabis for the purposes of and in connection with their employment; or

(c) a person who is acting as the agent or mandatary of a person whom they have reasonable grounds to believe is a person referred to in paragraph (b) and who possesses the cannabis for the purpose of assisting that person in the administration or enforcement of any Act or its regulations.

Employee, agent or mandatary — dried marihuana

(4) A person may possess dried marihuana if the person is an employee of or is acting as the agent or mandatary for a person referred to in paragraph (2)(b) or (c), while acting in the course of their employment or their role as agent or mandatary.

Employee, agent or mandatary — cannabis

(5) A person may possess cannabis if the person is an employee of or is acting as the agent or mandatary for a person referred to in paragraph (3)(a), while acting in the course of their employment or their role as agent or mandatary.

Providing assistance

(6) While in the presence of a person referred to in paragraph (2)(a) who has obtained dried marihuana for their own medical purposes and providing assistance in the administration of marihuana to that person, the person providing the assistance may, for the purpose of providing the assistance, possess a quantity of that dried marihuana not exceeding the daily quantity of dried marihuana that the person who obtained it is authorized to possess in accordance with section 4.

Possession limit — medical document

4. (1) An individual who obtains dried marihuana for their own medical purposes or for those of another individual for whom they are responsible from a licensed producer or a pharmacist, in accordance with a medical document, must not possess a quantity of dried marihuana that exceeds the lesser of

(a) 30 times the daily quantity referred to in paragraph 125(1)(d), and

(b) 150 g.

Obtained from practitioner

(2) An individual who obtains dried marihuana for their own medical purposes or for those of another individual for whom they are responsible from a health care practitioner in the course of treatment for a medical condition must not possess a quantity of dried marihuana that exceeds the lesser of

(a) 30 times the daily quantity referred to in subparagraph 126(b)(iii), and

(b) 150 g.

GENERAL PROVISIONS

Dried marihuana

5. (1) Dried marihuana must not be sold or provided under these Regulations

(a) with any additive; or

(b) in any dosage form, such as in a roll or capsule.

Definition of “additive”

(2) For the purpose of paragraph (1)(a), “additive” means anything other than dried marihuana.

Notice of refusal or revocation

6. If the Minister proposes to refuse to issue, amend or renew a licence or permit or proposes to revoke a licence or permit under these Regulations, other than in the case of a revocation under section 35 or 36 or subsection 73(1) or 80(1), the Minister must

(a) send a notice to the applicant or to the holder of the licence or permit together with a written report that sets out the reasons for the refusal or revocation; and

(b) give the applicant or holder an opportunity to be heard in respect of the refusal or revocation.

Further information

7. The Minister may, on receiving an application made under these Regulations, require the submission of any further information that pertains to the information contained in the application and that is necessary for the Minister to process the application.

Inspection of site

8. In order to confirm any information submitted in support of an application for a licence or an amendment or a renewal of a licence made under these Regulations, an inspector may, at a time during normal business hours and with the reasonable assistance of the applicant, inspect the site in respect of which the application was made.

Police enforcement

9. If, under the Controlled Drugs and Substances Act (Police Enforcement) Regulations, a member of a police force or a person acting under the direction and control of the member is, in respect of the conduct of the member or person, exempt from the application of subsection 4(2) or section 5, 6 or 7 of the Act, the member or person is, in respect of that conduct, exempt from the application of these Regulations.

Alteration of documents

10. A person must not mark, alter or deface in any manner a licence or permit issued under these Regulations.

PART 1

LICENSED PRODUCERS

DIVISION 1

PERMITTED ACTIVITIES AND GENERAL OBLIGATIONS

Activities

11. (1) Subject to subsections (2) to (7) and to the other provisions of these Regulations, a licensed producer may

(b) possess and produce cannabis, other than marihuana, solely for the purpose of conducting in vitro testing that is necessary to comply with the requirements of Divisions 4 and 5; and

(c) sell, provide, ship, deliver, transport and destroy cannabis, other than marihuana, that was obtained or produced solely for the purpose of conducting in vitro testing that is necessary to comply with the requirements of Divisions 4 and 5.

Restriction — cannabis and marihuana

(2) A licensed producer may sell or provide a substance referred to in subsection (3) to

(a) another licensed producer;

(b) a licensed dealer;

(c) the Minister; or

(d) a person to whom an exemption relating to the substance has been granted under section 56 of the Act.

Substances

(3) The substances that may be sold or provided under subsection (2) are

(a) marihuana; and

(b) cannabis, other than marihuana, that was obtained or produced solely for the purpose of conducting in vitro testing that is necessary to comply with the requirements of Divisions 4 and 5.

Restriction — dried marihuana

(4) A licensed producer may sell or provide dried marihuana — but not cannabis other than dried marihuana — to

(a) a registered client of that producer or an individual who is responsible for the client;

(b) a pharmacist;

(c) a health care practitioner;

(d) a hospital employee, if the possession of the dried marihuana is for the purposes of and in connection with their employment; or

(e) a person to whom an exemption relating to the dried marihuana has been granted under section 56 of the Act.

Activities limited

(5) A licensed producer may conduct an activity referred to in subsection (1), (2) or (4) if the producer

(a) is licensed to conduct the activity; and

(b) conducts the activity in accordance with the producer’s licence.

Import

(6) A licensed producer may import marihuana if the producer does so in accordance with an import permit issued under section 69.

Export

(7) A licensed producer may

(a) possess marihuana for the purpose of export; and

(b) export marihuana if the producer does so in accordance with an export permit issued under section 76.

Dwelling-place

12. A licensed producer must not conduct any activity referred to in section 11 at a dwelling-place.

Indoor activities only

13. A licensed producer must produce, package or label marihuana only indoors.

Indoor storage only

14. (1) A licensed producer must store cannabis only indoors at the site specified in the producer’s licence.

Storage of dried marihuana

(2) A licensed producer must store dried marihuana in accordance with the Security Directive.

Identification of licensed producer

15. A licensed producer must include their name, as set out in their licence, on all the means by which the producer identifies themself in relation to cannabis, including advertising, product labels, orders, shipping documents and invoices.

Alteration of medical document

16. A licensed producer must not mark, alter or deface in any manner a medical document.

Responsible person in charge present

17. A licensed producer must not perform a transaction involving cannabis unless the responsible person in charge or, if applicable, the alternate responsible person in charge is physically present at the site specified in the producer’s licence.

Safekeeping during transportation

18. A licensed producer must, when transporting imported marihuana between the port of entry and the site specified in their licence, or when shipping, delivering or transporting any marihuana, including to a port of exit, take any steps that are necessary to ensure its safekeeping during transportation.

Report of loss or theft

19. If a licensed producer experiences a theft of cannabis or an unusual waste or disappearance of cannabis that cannot be explained on the basis of normally accepted business activities, the licensed producer must

(a) report the occurrence to a member of a police force within 24 hours after becoming aware of it; and

(b) provide a written report to the Minister within 10 days after becoming aware of the occurrence.

Destruction

20. (1) A licensed producer must not destroy cannabis except in accordance with this section.

Destruction procedure

(2) A licensed producer may destroy cannabis if it is destroyed

(a) in accordance with a method that

(i) conforms with all federal, provincial and municipal environmental legislation applicable to the place of destruction, and

(ii) does not result in any person being exposed to cannabis smoke; and

(b) in the presence of at least two persons who are qualified to witness the destruction, one of whom must be a person referred to in paragraph (3)(a).

Witness to destruction

(3) The following persons are qualified to witness the destruction of cannabis:

(a) the senior person in charge, the responsible person in charge and, if applicable, the alternate responsible person in charge; and

(b) a person who works for or provides services to the licensed producer and acts in a senior position.

Transportation of cannabis

(4) If the cannabis is to be destroyed at a location other than the site specified in the producer’s licence, the senior person in charge, the responsible person in charge or, if applicable, the alternate responsible person in charge must accompany the cannabis to the location at which it is to be destroyed.

DIVISION 2

LICENSING

Eligible persons

21. The following persons are eligible to be a licensed producer:

(a) an adult who ordinarily resides in Canada; and

(b) a corporation that has its head office in Canada or operates a branch office in Canada and whose officers and directors are all adults.

Senior person in charge and responsible person in charge

22. (1) A licensed producer must designate

(a) a senior person in charge to have overall responsibility for management of the activities carried out by the licensed producer under the producer’s licence at the site specified in the licence — who may, if appropriate, be the licensed producer; and

(b) a responsible person in charge to work at the site specified in the licence and have responsibility for supervising the activities with respect to cannabis conducted at that site by the licensed producer under the producer’s licence and for ensuring that the activities comply with the Act and its regulations and the Food and Drugs Act — who may, if appropriate, be the senior person in charge.

Alternate responsible person in charge

(2) A licensed producer may designate an alternate responsible person in charge to work at the site specified in the licence and have authority to replace the responsible person in charge when that person is absent.

Eligibility

(3) The senior person in charge, the responsible person in charge and, if applicable, the alternate responsible person in charge

(a) must be adults; and

(b) must be familiar with the provisions of the Act and its regulations and the Food and Drugs Act that apply to the licence held by the licensed producer by whom they are designated.

Notice to local authorities

23. (1) Before submitting an application to the Minister under section 24, the applicant must provide the following persons with a written notice containing the information referred to in subsection (2):

(a) the local police force or Royal Canadian Mounted Police detachment that is responsible for providing policing services to the area in which the site referred to in paragraph 24(1)(b) is located;

(b) the local fire authority of that area; and

(c) the local government of that area.

Content of notice

(2) The notice must contain the following information:

(a) the name of the applicant;

(b) the date on which the applicant will submit the application to the Minister;

(c) the activities referred to in subsection 11(1) for which the licence is sought, specifying that they are to be conducted in respect of cannabis; and

(d) the address of the site and of each building within the site at which the applicant proposes to conduct those activities.

Senior official

(3) The notice must be addressed to a senior official of the local authority.

Application for licence

24. (1) To apply for a producer’s licence, a person must submit to the Minister an application that contains the following information:

(a) if the applicant is

(i) an individual, the individual’s name, date of birth and gender and any other name registered with a province, under which the individual intends to identify themself or conduct the activities for which the licence is sought (referred to in this section as “the proposed activities”), or

(ii) a corporation, its corporate name and any other name registered with a province, under which it intends to identify itself or conduct the proposed activities, as well as the name, date of birth and gender of each of its officers and directors;

(b) the address, telephone number and, if applicable, the facsimile number and email address for the site for which the licence is sought (referred to in this section as “the proposed site”) and each building within the site at which the proposed activities are to be conducted;

(c) the mailing address for the proposed site and for each building referred to in paragraph (b), if different from the address provided under that paragraph;

(d) the name, date of birth and gender of each of the following persons:

(i) the proposed senior person in charge,

(ii) the proposed responsible person in charge, and

(iii) if applicable, the proposed alternate responsible person in charge;

(e) the name and gender of each of the persons authorized to place an order for cannabis on behalf of the applicant;

(f) the proposed activities among those referred to in subsection 11(1), the purposes for conducting those activities and the substances in respect of which each of the activities is to be conducted;

(g) the proposed activities that are to be conducted at each building referred to in paragraph (b) and the substances in respect of which each of those activities is to be conducted at each building;

(h) a detailed description of the security measures at the proposed site, as determined in accordance with the Security Directive and Division 3;

(i) a detailed description of the method that the applicant proposes to use for keeping records;

(j) if applicable, the maximum quantity (expressed as the net weight in kilograms) of dried marihuana to be produced by the applicant under the licence and the production period; and

(k) if applicable, the maximum quantity (expressed as the net weight in kilograms) of dried marihuana to be sold or provided by the applicant under the licence to persons referred to in subsection 11(4) and the period in which that quantity is to be sold or provided.

Multiple sites

(2) If the applicant intends to engage in an activity referred to in subsection 11(1) at more than one site, a separate application must be made for each site.

Statement by signatory

(3) An application for a producer’s licence must

(a) be signed and dated by the proposed senior person in charge; and

(b) include a statement signed and dated by that person indicating that

(i) all of the information and documents submitted in support of the application are correct and complete to the best of their knowledge, and

(ii) they have the authority to bind the applicant.

Accompanying documents

(4) An application for a producer’s licence must be accompanied by

(a) a declaration, signed and dated by the proposed senior person in charge, stating that the proposed senior person in charge, the proposed responsible person in charge and, if applicable, the proposed alternate responsible person in charge are familiar with the provisions of the Act and its regulations and the Food and Drugs Act that will apply to the licence;

(b) if applicable, a copy of any document filed with the province in which the proposed site is located that states the applicant’s name and any other name registered with the province, under which the applicant intends to identify themself or conduct the proposed activities;

(c) if the applicant is a corporation, a copy of the certificate of incorporation or other constituting instrument;

(d) a declaration signed and dated by the proposed senior person in charge indicating whether or not the applicant is the owner of the entire proposed site;

(e) if the proposed site or any portion of it is not owned by the applicant, a declaration signed and dated by the owner of the site or each portion of the site consenting to the use of it by the applicant for the proposed activities;

(f) a declaration signed and dated by the proposed senior person in charge stating that the proposed site is not a dwelling-place;

(g) a declaration signed and dated by the proposed senior person in charge stating that the notices to local authorities have been provided in accordance with section 23 and specifying the names, titles and addresses of the officials to whom they were addressed and the dates on which they were provided, together with a copy of each notice;

(h) a document signed and dated by the quality assurance person referred to in section 54 that includes

(i) a description of the person’s qualifications in respect of the matters referred to in subparagraph 54(1)(a)(ii), and

(ii) a report establishing that the buildings, equipment and proposed sanitation program to be used in conducting the proposed activities referred to in Division 4 comply with the requirements of that Division; and

(i) floor plans for the site.

Method for keeping records

(5) The method of record keeping proposed by the applicant under paragraph (1)(i) must permit

(a) compliance with the requirements of Part 6;

(b) the Minister to audit the activities of the licensed producer with respect to cannabis; and

(c) the reconciliation of orders for and shipments and inventories of cannabis.

Security clearance required

25. The following persons must hold a security clearance:

(a) the senior person in charge;

(b) the responsible person in charge;

(c) if applicable, the alternate responsible person in charge;

(d) if a producer’s licence is issued to an individual, that individual; and

(e) if a producer’s licence is issued to a corporation, each officer and director of the corporation.

Issuance of licence

26. Subject to section 27, the Minister must, after examining the information and documents required under section 24 and, if applicable, section 7, and after all of the security clearances required by section 25 have been granted under section 85, issue to the applicant a producer’s licence that sets out the following information:

(a) the licence number;

(b) the name of the licence holder;

(c) the address of the site and of each building within the site at which the licensed producer may conduct the permitted activities;

(d) the permitted activities that may be conducted at each building and the substances in respect of which each of those activities may be conducted at each building;

(e) the security level of each building referred to in paragraph (c) at which dried marihuana is stored;

(f) the effective date of the licence;

(g) the expiry date of the licence, which must not be later than three years after its effective date;

(h) if applicable, the maximum quantity of dried marihuana that may be produced under the licence in a specified period, expressed as the net weight in kilograms;

(i) if applicable, the maximum quantity of dried marihuana that may be sold or provided under the licence in a specified period to persons referred to in subsection 11(4), expressed as the net weight in kilograms; and

(j) if applicable, any conditions that the licence holder must meet in order to

(i) comply with an international obligation,

(ii) provide the security level referred to in paragraph (e),

(iii) put in place the security measures referred to in Division 3, or

(iv) reduce any potential public health, safety or security risk, including the risk of cannabis being diverted to an illicit market or use.

Grounds for refusal

27. (1) The Minister must refuse to issue, renew or amend a producer’s licence in the following cases:

(a) the applicant is not eligible under section 21;

(b) the requirements of section 23 or 31, as applicable, have not been met;

(c) an inspector, who has requested an inspection, has not been given the opportunity by the applicant to conduct an inspection under section 8;

(d) the Minister has reasonable grounds to believe that false or misleading information or false or falsified documents were submitted in or with the application;

(e) information received from a peace officer, a competent authority or the United Nations raises reasonable grounds to believe that the applicant has been involved in the diversion of a controlled substance or precursor to an illicit market or use;

(f) the applicant does not have in place the security measures set out in the Security Directive and Division 3 in respect of an activity for which the licence is requested;

(g) the applicant is in contravention of or has contravened in the past 10 years

(i) a provision of the Act or its regulations, or

(ii) a term or condition of another licence or a permit issued to it under any of those regulations;

(h) the issuance, renewal or amendment of the licence would likely create a risk to public health, safety or security, including the risk of cannabis being diverted to an illicit market or use;

(i) any of the following persons does not hold a security clearance:

(i) the senior person in charge,

(ii) the responsible person in charge,

(iii) if applicable, the alternate responsible person in charge,

(iv) if the applicant is an individual, that individual, and

(v) if the applicant is a corporation, any of its officers or directors of the corporation;

(j) the proposed method of record keeping referred to in paragraph 24(1)(i) does not meet the requirements of subsection 24(5); or

(k) if applicable, the information required under section 7 has not been provided or is insufficient to process the application.

Exception

(2) Unless it is necessary to do so to protect public health, safety or security, including preventing cannabis from being diverted to an illicit market or use, the Minister must not refuse to issue, renew or amend a licence under paragraph (1)(d) or (g) if the applicant has carried out, or signed an undertaking to carry out, the necessary corrective measures to ensure compliance with the Act and its regulations and the Food and Drugs Act.

Failure to comply with undertaking

(3) If an applicant fails to comply with an undertaking referred to in subsection (2), the Minister must refuse to issue, renew or amend the licence.

Period of validity

28. A producer’s licence is valid until the earlier of

(a) the expiry date of the licence, and

(b) the date on which the licence is revoked under section 35, 36 or 37.

Application for renewal

29. (1) To apply to renew their licence, a licensed producer must submit to the Minister an application that contains the following:

(a) the original of the licence that is to be renewed; and

(b) a declaration signed and dated by the senior person in charge indicating that as of the date of the application

(i) that person has the authority to bind the applicant, and

(ii) to the best of that person’s knowledge,

(A) all of the information shown on the producer’s licence as specified in paragraphs 26(a) to (e) and (h) to (j) is correct and complete, and

(B) if applicable, the requirements of sections 32 and 33 have been met.

Issuance

(2) Subject to section 27, the Minister must, after examining the information and documents required under subsection (1) and, if applicable, section 7, issue a renewed producer’s licence that contains the information set out in paragraphs 26(a) to (j).

Simultaneous processing of applications

(3) If a licensed producer submits an application under section 30 or paragraph 32(1)(a) together with an application under subsection (1), the Minister may process them simultaneously.

Application for amendment

30. (1) A licensed producer proposing to amend the content of their licence must provide the Minister with the following documents:

(a) an application in writing describing the proposed amendment, as well as any information or documents mentioned in section 24 that are relevant to the proposed amendment;

(b) if applicable, a declaration signed and dated by the senior person in charge stating that the notices to local authorities have been provided in accordance with section 31 and specifying the names, titles and addresses of the officials to whom they were addressed and the dates on which they were provided, together with a copy of each notice; and

(c) the original of the licence.

Statement by signatory

(2) The application must

(a) be signed and dated by the senior person in charge; and

(b) include a statement signed and dated by that person indicating that

(i) all of the information and documents submitted in support of the application are correct and complete to the best of their knowledge, and

(ii) they have the authority to bind the applicant.

Issuance

(3) Subject to section 27, the Minister must, after examining the information and documents required under this section and, if applicable, section 7, amend the licence accordingly and may add any conditions that the licence holder must meet in order to

(a) comply with an international obligation;

(b) provide the security level referred to in paragraph 26(e) or the new level applicable as a result of the amendment of the licence;

(c) put in place the security measures referred to in Division 3; or

(d) reduce any potential public health, safety or security risk, including the risk of cannabis being diverted to an illicit market or use.

Notice to local authorities

31. (1) Before submitting a licence amendment application to the Minister under section 30 concerning a change referred to in subsection (2), a licensed producer must provide the following persons with a written notice containing the information referred to in subsection (3):

(a) the local police force or Royal Canadian Mounted Police detachment that is responsible for providing policing services to the area in which the site to be specified in the amended licence is located;

(b) the local fire authority of that area; and

(c) the local government of that area.

Applicable changes

(2) Subsection (1) applies in respect of a licence amendment application concerning a change to

(a) the name of the licensed producer;

(b) the activities to be conducted by the producer under the licence; or

(c) the address of the site and of each building within the site at which those activities are to be conducted.

Content of notice

(3) The notice must contain the following information:

(a) the name of the licensed producer and, if applicable, the proposed new name of the producer;

(b) the date on which the producer will submit the application to the Minister;

(c) the activities referred to in subsection 11(1) that are to be set out in the amended licence, specifying that they are to be conducted in respect of marihuana; and

(d) the address of the site and of the buildings within the site that are to be set out in the amended licence.

Senior official

(4) The notice must be addressed to a senior official of the local authority.

Notice to Minister — change of personnel

32. (1) A licensed producer must

(a) apply for and obtain the Minister’s approval before making a change involving the replacement or the addition of

(i) the senior person in charge,

(ii) the responsible person in charge and, if applicable, the alternate responsible person in charge,

(iii) if applicable, an officer or director referred to in subparagraph 24(1)(a)(ii), or

(iv) a person authorized to place an order for cannabis on behalf of the licensed producer;

(b) except in the case referred to in subsection (3), notify the Minister, not later than five days after the event, when a person referred to in any of subparagraphs (a)(i), (ii) or (iv) ceases to carry out their duties; and

(c) notify the Minister, not later than five days after the event, when a person referred to in subparagraph (a)(iii) ceases to be an officer or director.

Accompanying information

(2) The licensed producer must, with the application for approval referred to in paragraph (1)(a), provide the Minister with the following information and documents with respect to the new person:

(a) in the case of the replacement of the senior person in charge or the responsible person in charge or the replacement or addition of an alternate responsible person in charge,

(i) the information specified in paragraph 24(1)(d), and

(ii) the declaration specified in paragraph 24(4)(a);

(b) in the case of the replacement or addition of an officer or director, the information specified in subparagraph 24(1)(a)(ii) concerning that person; and

(c) in the case of the replacement or addition of a person who is authorized to place an order for cannabis on behalf of the licensed producer, the information specified in paragraph 24(1)(e).

Notice to Minister — responsible person in charge

(3) A licensed producer must notify the Minister not later than the next business day if the responsible person in charge ceases to carry out their duties and there is no person designated as alternate responsible person in charge.

Notice to Minister — various changes

33. (1) A licensed producer must, within five days after the change, notify the Minister of any change to

(a) the method used for keeping records;

(b) the telephone number and, if applicable, the facsimile number and email address for the site and each building within the site at which the activities are conducted under the licence; or

(c) the security of the site, other than one that affects the security level of the site.

Notice — change in owner of site

(2) If there is a change in the ownership of the site specified in the producer’s licence or any portion of it, the licensed producer must, within five days after becoming aware of the change, notify the Minister of the change and provide the Minister with a copy of a notice sent to the new owner by the producer that indicates the activities with respect to cannabis that are being conduced at that site.

Statement by signatory of notice

34. An application or notification made under section 32 or 33 must

(a) be signed and dated by the senior person in charge; and

(b) include a statement signed and dated by that person indicating that

(i) all information and, if applicable, documents submitted in support of the application or notification are correct and complete to the best of their knowledge, and

(ii) they have the authority to bind the licensed producer.

Revocation — lost or stolen licence

35. The Minister must revoke a producer’s licence on being notified by the licensed producer that the licence has been lost or stolen.

Revocation — notice of cessation of activities

36. (1) A licensed producer who intends to cease conducting activities at the site specified in their licence must submit to the Minister a written notice to that effect at least 30 days before ceasing those activities.

Content of notice

(2) The notice must be signed and dated by the senior person in charge and contain the following information:

(a) the expected date of the cessation of activities at the site;

(b) a description of the manner in which any cannabis remaining on the site as of the date referred to in paragraph (a) will be dealt with, including

(i) if some or all of it will be sold or provided to another licensed producer who will be conducting activities at that site, the name of that producer,

(ii) if some or all of it will be sold or provided to another licensed producer or licensed dealer, the name of that producer or dealer and the address of their site, and

(iii) if some or all of it will be destroyed, the date and location of the destruction;

(c) the address of the location where the licensed producer’s records, books, electronic data and other documents will be kept; and

(d) the name, address, telephone number and, if applicable, the facsimile number and email address of a person who the Minister may contact for further information.

Update and request for revocation

(3) After having ceased the activities, the licensed producer must submit to the Minister the original of the licence and a request for revocation of the licence, signed and dated by the senior person in charge, that contains a detailed update of the information referred to in paragraphs (2)(a) to (d), if it differs from what was set out in the notice submitted under subsection (1).

Revocation

(4) The Minister must revoke the licence after receiving the request for revocation.

Revocation — other grounds

37. (1) Subject to subsection (2), the Minister must revoke a producer’s licence in the following circumstances:

(a) the Minister has reasonable grounds to believe that the licence was issued on the basis of false or misleading information or false or falsified documents submitted in or with the application;

(b) the licensed producer has contravened a provision of the Act or its regulations or the Food and Drugs Act or a term or condition of their licence or of an import or export permit issued under these Regulations;

(c) the licensed producer is no longer eligible under section 21;

(d) any of the persons referred to in section 25 does not hold a security clearance; or

(e) information received from a peace officer, a competent authority or the United Nations raises reasonable grounds to believe that the licensed producer has been involved in the diversion of a controlled substance or precursor to an illicit market or use.

Exceptions

(2) Unless it is necessary to do so to protect public health, safety or security, including preventing cannabis from being diverted to an illicit market or use, the Minister must not revoke a producer’s licence in the circumstances described in paragraph (1)(a) or (b) if the licensed producer has carried out, or signed an undertaking to carry out, the necessary corrective measures to ensure compliance with the Act and its regulations and the Food and Drugs Act.

Failure to comply with undertaking

(3) If the licensed producer fails to comply with an undertaking referred to in subsection (2), the Minister must revoke the licence.

Revocation following suspension

(4) The Minister may revoke a licence if the licensed producer fails to comply with the decision of the Minister to suspend the licence under section 38 or if the situation giving rise to the suspension is not rectified.

Suspension

38. (1) The Minister must suspend a producer’s licence without prior notice in respect of any or all activities or substances set out in the licence if the Minister has reasonable grounds to believe that it is necessary to do so to protect public health, safety or security, including preventing cannabis from being diverted to an illicit market or use.

Notice of suspension

(2) The suspension takes effect as soon as the Minister notifies the licence holder of the licence of the decision to suspend and provides a written report that sets out the reasons for the suspension.

Opportunity to be heard

(3) A person whose licence is suspended in whole or in part under subsection (1) may, within 10 days after receipt of the notice, provide the Minister with reasons why the suspension is unfounded.

Ceasing of suspended activities

(4) If a licence is suspended in respect of any or all activities or substances set out in the licence, the licensed producer must cease conducting those activities with respect to those substances for the duration of the suspension.

Reinstatement of licence

(5) The Minister may, by notice to the licensed producer, reinstate a licence, in respect of any or all activities or substances affected by the suspension, if

(a) the failure that gave rise to the suspension has been rectified; or

(b) the licensed producer demonstrates to the Minister that the suspension was unfounded.

DIVISION 3

SECURITY MEASURES

General

Compliance with security measures

39. A licensed producer must ensure that the security measures set out in this Division are carried out.

Unauthorized access

40. The site and its restricted areas must be designed in a manner that prevents unauthorized access.

Restricted Areas

Restricted access

41. (1) Access to each restricted area must be limited to persons whose presence in the area is required by their work responsibilities.

Record

(2) A record must be kept of every person entering or exiting each restricted area.

Visual monitoring

42. Restricted areas must be visually monitored at all times to detect illegal conduct.

Intrusion detection system

43. (1) Restricted areas must be secured by an intrusion detection system that operates at all times and that includes measures to detect attempted or actual unauthorized access to or movement in a restricted area or tampering with the system.

Monitoring

(2) The system must be monitored at all times by personnel who can determine the appropriate steps to be taken in response to any detected activity that is unauthorized.

Filtration of exhaust air

44. Restricted areas must be equipped with a system that filters exhaust air to prevent the escape of pollen and odours.

Site

Visual monitoring

45. The perimeter of the site must be visually monitored at all times to detect attempted or actual unauthorized access.

Intrusion detection system

46. (1) The perimeter of the site must be secured by an intrusion detection system that operates at all times and that includes measures to detect attempted or actual unauthorized access to or movement in the site or tampering with the system.

Monitoring

(2) The system must be monitored at all times by personnel who can determine the appropriate steps to be taken in response to any detected activity that is unauthorized.

DIVISION 4

GOOD PRODUCTION PRACTICES

Prohibition — sale or provision

47. (1) A licensed producer must not sell or provide to a person referred to in subsection 11(4) dried marihuana in respect of which the requirements of this Division have not been met.

Prohibition — export

(2) A licensed producer must not export dried marihuana in respect of which the requirements of this Division have not been met.

Microbial and chemical content

48. (1) The microbial and chemical content of dried marihuana must be within generally accepted tolerance limits for herbal medicines for human consumption, as established in any publication referred to in Schedule B to the Food and Drugs Act.

Pest control product residue

(2) Dried marihuana must not contain any residue of a pest control product in excess of any maximum residue limit specified for the product under section 9 or 10 of the Pest Control Products Act.

Analytical testing

(3) Analytical testing for microbial and chemical contaminants and for levels of delta-9-tetrahydrocannabinol and cannabidiol must be conducted using validated methods.

Premises

49. (1) Dried marihuana must be produced, packaged, labelled and stored in premises that are designed, constructed and maintained in a manner that permits those activities to be conducted under sanitary conditions, and in particular that

(a) permits the premises to be kept clean and orderly;

(b) permits the effective cleaning of all surfaces in the premises;

(c) permits the dried marihuana to be stored or processed appropriately;

(d) prevents the contamination of the dried marihuana; and

(e) prevents the addition of an extraneous substance to the dried marihuana.

Storage

(2) Dried marihuana must be stored under conditions that will maintain its quality.

Equipment

50. Dried marihuana must be produced, packaged, labelled and stored using equipment that is designed, constructed, maintained, operated and arranged in a manner that

(a) permits the effective cleaning of its surfaces;

(b) permits it to function in accordance with its intended use;

(c) prevents it from contaminating the dried marihuana; and

(d) prevents it from adding an extraneous substance to the dried marihuana.

Sanitation program

51. Dried marihuana must be produced, packaged, labelled and stored in accordance with a sanitation program that sets out

(a) procedures for effectively cleaning the premises in which those activities are conducted;

(b) procedures for effectively cleaning the equipment used in those activities;

(c) procedures for handling any substance used in those activities; and

(d) all requirements, in respect of the health, the hygienic behaviour and the clothing of the personnel who are involved in those activities, that are necessary to ensure that those activities are conducted in sanitary conditions.

Standard operating procedures

52. Dried marihuana must be produced, packaged, labelled and stored in accordance with standard operating procedures that are designed to ensure that those activities are conducted in accordance with the requirements of this Division.

Recall

53. A licensed producer must establish and maintain a system of control that permits the rapid and complete recall of every lot or batch of dried marihuana that has been made available for sale.

Quality assurance

54. (1) A licensed producer must

(a) have a quality assurance person who

(i) is responsible for assuring the quality of the dried marihuana before it is made available for sale, and

(ii) has the training, experience and technical knowledge relating to the activity conducted and the requirements of this Division; and

(b) investigate every complaint received in respect of the quality of the dried marihuana and, if necessary, take corrective and preventative measures.

Materials and procedures

(2) Dried marihuana must be produced, packaged, labelled and stored using methods and procedures that, prior to their implementation, have been approved by a quality assurance person.

Approval prior to sale

(3) Every lot or batch of dried marihuana must be approved by a quality assurance person before it is made available for sale.

Returns

(4) Dried marihuana that is sold to a person referred to in subsection 11(4) and subsequently returned to the licensed producer must not be resold.

Lot or batch samples

55. (1) Subject to subsection (3), if the Minister has reasonable grounds to believe that a lot or batch of dried marihuana made available for sale may — by reason of the manner in which it was produced, packaged, labelled or stored — pose a risk to the health of an individual who in accordance with these Regulations obtains the dried marihuana for their own medical purposes, the Minister may require the licensed producer who sold or provided the dried marihuana to provide the Minister with a sample of that lot or batch.

Quantity

(2) The sample must be of sufficient quantity to enable a determination of whether the lot or batch of dried marihuana meets the requirements of section 48.

Period

(3) The Minister must not require a sample to be provided if more than one year has elapsed after the date of the last sale or provision of any portion of the lot or batch of dried marihuana.

Recall reporting

56. A licensed producer who commences a recall of dried marihuana must provide the Minister with the following information in respect of the recalled dried marihuana within three days after the day on which the recall is commenced:

(a) its brand name;

(b) the number of each lot or batch recalled;

(c) if known by the licensed producer, the name and address of each licensed producer who imported or produced any of it;

(d) the reasons for commencing the recall;

(e) the quantity produced or imported into Canada by the licensed producer;

(f) the quantity that was sold or provided in Canada by the licensed producer;

(g) the quantity remaining in the possession of the licensed producer;

(h) the number of persons referred to in subsections 11(2) and (4) to whom it was sold or provided by the licensed producer; and

(i) a description of any other action that the licensed producer is taking in respect of the recall.

Adverse reactions

57. (1) A licensed producer who sells or provides dried marihuana must provide the Minister with a case report for each serious adverse reaction to the dried marihuana, within 15 days after the day on which the producer becomes aware of the reaction.

Summary report

(2) A licensed producer who sells or provides dried marihuana must annually prepare and maintain a summary report that contains a concise and critical analysis of all adverse reactions to the dried marihuana that have occurred during the previous 12 months.

Provide Minister with report on request

(3) If, after reviewing a case report provided under subsection (1) or after reviewing any other safety data relating to the dried marihuana, the Minister has reasonable grounds to believe that the dried marihuana may — by reason of the manner in which it was produced, packaged, labelled or stored — pose a risk to the health of an individual who in accordance with these Regulations obtains the dried marihuana for their own medical purposes, the Minister may request that, within 30 days after the day on which the request is received, the licensed producer

(a) provide the Minister with a copy of any summary report prepared under subsection (2); or

(b) prepare and provide the Minister with an interim summary report containing a concise and critical analysis of all adverse reactions to the dried marihuana that have occurred since the date of the most recent summary report prepared under subsection (2).

DIVISION 5

PACKAGING, LABELLING AND SHIPPING

Packaging

58. A licensed producer who sells or provides dried marihuana to a person referred to in subsection 11(4) must ensure that

(a) the dried marihuana is packaged in an immediate container

(i) that keeps the dried marihuana dry and free from contamination,

(ii) that has a security feature that provides reasonable assurance to consumers that the container has not been opened prior to receipt, and

(iii) that is a child resistant package that meets the requirements of subsections C.01.001(2) to (4) of the Food and Drug Regulations; and

(b) not more than 15 g of dried marihuana is in the immediate container.

Weight of dried marihuana

59. A licensed producer who sells or provides dried marihuana to a person referred to in subsection 11(4) must ensure that the net weight of the dried marihuana in the immediate container is not less than 90% and not more than 101% of the net weight specified on the label in accordance with subparagraph 60(c)(v).

Product label

60. A licensed producer who sells or provides dried marihuana to a person referred to in subsection 11(4) must ensure that the immediate container carries a label that contains the following information:

(a) the name of that licensed producer;

(b) the words “Dried marihuana / Marihuana séchée”;

(c) in respect of the dried marihuana in the container:

(i) its brand name,

(ii) its lot number, preceded by one of the following designations:

(A) “Lot number”,

(B) “Lot no.”,

(C) “Lot”, or

(D) “(L)”,

(iii) the percentage of delta-9-tetrahydrocannabinol w/w, followed by the word “delta-9-tetrahydrocannabinol”,

(iv) the percentage of cannabidiol w/w, followed by the word “cannabidiol”,

(v) its net weight, in grams,

(vi) its recommended storage conditions,

(vii) its packaging date, and

(viii) either

(A) its expiry date, if a stability period for the dried marihuana has been established in accordance with section 65, or

(B) a statement to the effect that no expiry date based on stability data has been determined for the dried marihuana;

(d) the symbol “N” set out in the upper left corner of the label in a colour contrasting with the rest of the label or in type not less than half the size of any other letters used on the label;

(e) the warning “KEEP OUT OF REACH OF CHILDREN/TENIR HORS DE LA PORTÉE DES ENFANTS”; and

61. A licensed producer who sells or provides dried marihuana to a registered client or an individual who is responsible for the client must ensure that

(a) the immediate container carries a label that contains the following information:

(i) the given name and surname of the client,

(ii) the given name, surname and profession of the health care practitioner who provided the client’s medical document,

(iii) the name of the licensed producer,

(iv) the daily quantity of dried marihuana indicated on the client’s medical document,

(v) the expiry date of the client’s registration referred to in section 107,

(vi) the shipping date, and

(vii) the date referred to in subsection 120(2); and

(b) a separate document containing the information referred to in paragraph (a) accompanies each shipment of the dried marihuana.

Combined label

62. In the case of dried marihuana to be sold or provided to a registered client or an individual who is responsible for the client, the information required under section 60 and paragraph 61(a) may be set out on one label.

Department of Health document

63. A licensed producer who sells or provides dried marihuana to a person referred to in subsection 11(4) must ensure that each shipment of the dried marihuana is accompanied by a copy of the current version of the document entitled Information on the Use of Marihuana for Medical Purposes, published by the Department of Health.

Presentation of information — label

64. (1) All information that is required under section 60 and paragraph 61(a) to appear on a label must be

(a) in English and in French;

(b) clearly and prominently displayed on the label; and

(c) readily discernible under the customary conditions of purchase and use.

Presentation of information — document

(2) All information in a document that is required under paragraph 61(b) or section 63 must be in English and in French and readily discernible.

Expiry date

65. (1) A licensed producer must not include an expiry date on a label referred to in section 60 unless

(a) the licensed producer has submitted data to the Minister that establishes the stability period during which, after the dried marihuana is packaged in accordance with section 58 and when it is stored under its recommended storage conditions referred to in subparagraph 60(c)(vi),

(i) the dried marihuana maintains not less than 80% and not more than 120% of the percentages of delta-9-tetrahydrocannabinol w/w and cannabidiol w/w indicated on the label in accordance with subparagraphs 60(c)(iii) and (iv), and

(ii) the microbial and chemical content of the dried marihuana remains within the limits referred to in subsection 48(1); and

(b) the Minister is satisfied that the data submitted by the licensed producer meets the requirements of paragraph (a) and has notified the producer to that effect.

Definition of “expiry date”

(2) For the purpose of subsection (1) and subparagraph 60(c)(viii), “expiry date” means the date, expressed at minimum as a year and month, that is the end of the stability period.

Reference to Acts or regulations

66. It is prohibited to include a reference, direct or indirect, to the Act, the Food and Drugs Act or any regulations made under those Acts on a label of or in an advertisement for dried marihuana unless the reference is a specific requirement of either of those Acts or those regulations.

Shipping

67. (1) A licensed producer who ships dried marihuana to a person referred to in subsection 11(2) or (4) must

(a) ship the marihuana in only one shipment per order;

(b) securely pack the marihuana in a package that

(i) will not open or permit the escape of its contents during handling and transportation,

(ii) is sealed so that the package cannot be opened without the seal being broken,

(iii) prevents the escape of odour associated with the marihuana, and

(iv) prevents the contents from being identified without the package being opened;

(c) use a shipping method that involves

(i) a means of tracking the package during transit, and

(ii) the safekeeping of the package during transit;

(d) ship it only to the following address:

(i) in the case of a registered client or an individual who is responsible for that client, the shipping address specified in the client’s registration document, and

(ii) in the case of any other person referred to in subsection 11(2) or (4), the shipping address indicated in the order referred to in section 128; and

(e) in the case of a registered client or an individual who is responsible for that client, ship the marihuana in a quantity that does not exceed 150 g.

Shipping — cannabis other than dried marihuana

(2) A licensed producer who ships cannabis other than dried marihuana to a person referred to in subsection 11(2) must

(a) use a shipping method referred to in paragraph (1)(c); and

(b) ship it only to the shipping address indicated in the order referred to in section 128.

DIVISION 6

IMPORT AND EXPORT

Application for import permit

68. (1) To apply for a permit to import marihuana, a licensed producer must submit the following information to the Minister:

(a) their name, address and licence number;

(b) in respect of the marihuana to be imported,

(i) a description of it,

(ii) if applicable, its brand name,

(iii) the quantity to be imported, and

(iv) in the case of dried marihuana, its percentages of delta-9-tetrahydrocannabinol w/w and cannabidiol w/w;

(c) the name and address of the exporter in the country of export from whom the marihuana is being obtained;

(d) the port of entry;

(e) the address of the customs office, sufferance warehouse or bonded warehouse to which the marihuana is to be delivered; and

(f) each mode of transportation used, the country of export and, if applicable, any country of transit or transhipment.

Statement by signatory

(2) An application for an import permit must

(a) be signed and dated by the responsible person in charge or, if applicable, the alternate responsible person in charge at the site to which the marihuana will be transported directly after clearing customs; and

(b) include a statement, signed and dated by that person, indicating that all information submitted in support of the application is correct and complete to the best of the signatory’s knowledge.

Issuance of import permit

69. (1) Subject to section 70, the Minister must, after examining the information and documents required under section 68 and, if applicable, section 7, issue to the licensed producer an import permit that sets out the following information:

(a) the permit number;

(b) the information referred to in paragraphs 68(1)(a) to (f);

(c) the effective date;

(d) the expiry date, which is the earlier of

(i) 180 days after the effective date, and

(ii) December 31 of the year of the effective date; and

(e) if applicable, any conditions that the permit holder must meet in order to

(i) comply with an international obligation, or

(ii) reduce any potential public health, safety or security risk, including the risk of the marihuana being diverted to an illicit market or use.

Duration of permit

(2) An import permit is valid until the earliest of

(a) the expiry of the permit;

(b) the expiry of the producer’s licence that pertains to the permit;

(c) the revocation or suspension of the permit under section 73 or 74; and

(d) the expiry, suspension or revocation of the export permit that applies to the marihuana to be imported and that is issued by a competent authority in the country of export.

Validity

(3) A permit issued under this section is valid only for the importation in respect of which it is issued.

Refusal to issue import permit

70. The Minister must refuse to issue an import permit if

(a) in respect of the application for the permit, there exists a circumstance described in paragraph 27(1)(d), (e), (f) or (h), with any modifications that the circumstances require;

(b) the applicant does not hold a producer’s licence for the marihuana that is to be imported;

(c) the applicant has been notified in accordance with paragraph 6(a) that one of the following applications submitted by the applicant in respect of the producer’s licence pertaining to the requested permit is to be refused under section 27:

(i) an application under section 24 for a producer’s licence,

(ii) an application under section 29 for the renewal of a producer’s licence, or

(iii) an application under section 30 for the amendment of a producer’s licence; or

(d) the Minister has reasonable grounds to believe that

(i) the shipment for which the permit is requested would contravene the laws of the country of export or any country of transit or transhipment, or

(ii) the importation is for the purpose of re-exporting the marihuana.

Provision of copy of import permit

71. The holder of an import permit for marihuana must provide a copy of the permit to the customs office, sufferance warehouse or bonded warehouse, as the case may be, at the port of entry at the time of importation.

Declaration after release from customs

72. The holder of an import permit must provide the Minister, within 15 days after the day of release, in accordance with the Customs Act, of a shipment that contains marihuana, with a declaration that contains the following information:

(a) the name of the licensed producer and the numbers of the producer’s licence and import permit in respect of the shipment;

(b) the date of release of the shipment;

(c) a description of the marihuana received;

(d) if applicable, the brand name of the marihuana received;

(e) the quantity of marihuana received; and

(f) in the case of dried marihuana, its percentages of delta-9-tetrahydrocannabinol w/w and cannabidiol w/w.

Revocation of import permit

73. (1) The Minister must revoke an import permit

(a) at the request of the holder;

(b) if the holder informs the Minister that the permit has been lost or stolen; or

(c) if the permit is being replaced by a new permit.

Other revocation circumstances

(2) Subject to subsection (3), the Minister must revoke an import permit in accordance with section 6 in the following circumstances:

(a) there exists a circumstance described in any of paragraphs 37(1)(a) to (e) in respect of the producer’s licence pertaining to the permit;

(b) the Minister has reasonable grounds to believe that the import permit was issued on the basis of false or misleading information or false or falsified documents submitted in or with the application for the permit; or

(c) the importation is for the purpose of re-exporting the marihuana.

Exceptions

(3) Unless it is necessary to do so to protect public health, safety or security, including preventing the marihuana from being diverted to an illicit market or use, the Minister must not revoke an import permit in the circumstances described in paragraph (2)(b) or 37(1)(a) or (b) if the permit holder has carried out, or signed an undertaking to carry out, the necessary corrective measures to ensure compliance with the Act and its regulations and the Food and Drugs Act.

Failure to comply with undertaking

(4) If the licensed producer fails to comply with an undertaking mentioned in subsection (3), the Minister must revoke the permit.

Revocation following suspension

(5) The Minister may revoke a permit if the licensed producer fails to comply with the decision of the Minister to suspend the permit under section 74 or if the situation giving rise to the suspension is not rectified.

Suspension of import permit

74. (1) The Minister must suspend an import permit without prior notice if

(a) the Minister has reasonable grounds to believe that it is necessary to do so to protect public health, safety or security, including preventing the marihuana from being diverted to an illicit market or use; or

(b) the importation would contravene the laws of any country of transit or transhipment.

Notice of suspension

(2) The suspension takes effect as soon as the Minister notifies the permit holder of the decision to suspend and provides a written report that sets out the reasons for the suspension.

Opportunity to be heard

(3) A person whose permit is suspended under subsection (1) may, within 10 days after receipt of the notice, provide the Minister with reasons why the suspension is unfounded.

Application for export permit

75. (1) To apply for a permit to export marihuana, a licensed producer must submit the following information and statements to the Minister:

(a) their name, address and licence number;

(b) in respect of the marihuana to be exported,

(i) a description of it,

(ii) if applicable, its brand name,

(iii) the quantity to be exported, and

(iv) its percentages of delta-9-tetrahydrocannabinol w/w and cannabidiol w/w;

(c) the name and address of the importer in the country of final destination;

(d) the port of exit and, if applicable, any country of transit or transhipment;

(e) the address of the customs office, sufferance warehouse or bonded warehouse at which the shipment is to be presented for export;

(f) each mode of transportation used; and

(g) a statement that, to the best of their knowledge, the shipment does not contravene the laws of the country of final destination or any country of transit or transhipment.

Accompanying document

(2) An application for an export permit must be accompanied by a copy of the import permit issued by a competent authority in the country of final destination that sets out the name and address of the site of the importer in the country of final destination.

Statement by signatory

(3) An application for an export permit must

(a) be signed and dated by the responsible person in charge or the alternate responsible person in charge at the site from which the marihuana will be sent to the port of exit; and

(b) include a statement, signed and dated by that person, indicating that all information submitted in support of the application is correct and complete to the best of the signatory’s knowledge.

Issuance of export permit

76. (1) Subject to section 77, the Minister must, after examining the information and documents required under section 75 and, if applicable, section 7, issue an export permit to the licensed producer that sets out the following information:

(a) the permit number;

(b) the information referred to in paragraphs 75(1)(a) to (f);

(c) the date of issuance;

(d) the date of expiry, which must be the earliest of

(i) 120 days after the permit is issued,

(ii) December 31 of the year in which the permit is issued, and

(iii) the expiry date of the import permit issued by a competent authority in the country of final destination; and

(e) if applicable, any conditions that the permit holder must meet in order to

(i) comply with an international obligation, or

(ii) reduce any potential public health, safety or security risk, including the risk of the marihuana being diverted to an illicit market or use.

Duration of permit

(2) An export permit is valid until the earliest of

(a) the expiry of the permit;

(b) the expiry of the producer’s licence that pertains to the permit;

(c) the revocation or suspension of the permit under section 80 or 81; and

(d) the expiry, suspension or revocation of the import permit that applies to the marihuana to be exported and that is issued by a competent authority in the country of final destination.

Validity

(3) A permit issued under this section is valid only for the exportation in respect of which it is issued.

Refusal to issue export permit

77. The Minister must refuse to issue an export permit if

(a) in respect of the application for the permit, there exists a circumstance described in paragraph 27(1)(d), (e) or (h), with any modifications that the circumstances require;

(b) the applicant does not hold a producer’s licence for the marihuana to be exported;

(c) the applicant has been notified in accordance with paragraph 6(a) that one of the following applications submitted by the applicant in respect of the producer’s licence pertaining to the requested permit is to be refused under section 27:

(i) an application made under section 24 for a producer’s licence,

(ii) an application made under section 29 for the renewal of a producer’s licence, or

(iii) an application made under section 30 for the amendment of a producer’s licence;

(d) the Minister has reasonable grounds to believe that the shipment for which the permit is requested would contravene the laws of the country of final destination or any country of transit or transhipment; or

(e) the shipment would not be in conformity with the import permit issued by a competent authority of the country of final destination.

Provision of copy of permit

78. The holder of an export permit for marihuana must provide a copy of the permit to the customs office, sufferance warehouse or bonded warehouse, as the case may be, at the port of exit at the time of exportation.

Declaration after export

79. The holder of an export permit must provide the Minister, within 15 days after the day on which a shipment that contains marihuana is exported, with a declaration that contains the following information:

(a) the name of the licensed producer and the numbers of the producer’s licence and export permit in respect of the shipment;

(b) the date of export;

(c) a description of the exported marihuana;

(d) if applicable, the brand name of the exported marihuana; and

(e) the quantity of exported marihuana.

Revocation of export permit

80. (1) The Minister must revoke an export permit

(a) at the request of the holder;

(b) if the holder informs the Minister that the permit has been lost or stolen; or

(c) if the permit is being replaced by a new permit

Other revocation circumstances

(2) Subject to subsection (3), the Minister must revoke an export permit in accordance with section 6 in the following circumstances:

(a) there exists a circumstance described in any of paragraphs 37(1)(a) to (e) in respect of the producer’s licence pertaining to the permit; or

(b) the Minister has reasonable grounds to believe that the export permit was issued on the basis of false or misleading information or false or falsified documents submitted in or with the application.

Exceptions

(3) Unless it is necessary to do so to protect public health, safety or security, including preventing the marihuana from being diverted to an illicit market or use, the Minister must not revoke an export permit in the circumstances described in paragraph (2)(b) or 37(1)(a) or (b) if the permit holder has carried out, or signed an undertaking to carry out, the necessary corrective measures to ensure compliance with the Act and its regulations and the Food and Drugs Act.

Failure to comply with undertaking

(4) If the licensed producer fails to comply with an undertaking mentioned in subsection (3), the Minister must revoke the permit.

Revocation following suspension

(5) The Minister may revoke a permit if the licensed producer fails to comply with the decision of the Minister to suspend the permit under section 81 or if the situation giving rise to the suspension is not rectified.

Suspension of export permit

81. (1) The Minister must suspend an export permit without prior notice if

(a) the Minister has reasonable grounds to believe that it is necessary to do so to protect public health, safety or security, including preventing the marihuana from being diverted to an illicit market or use;

(b) the exportation is not in conformity with an import permit issued by a competent authority of the country of final destination; or

(c) the exportation would contravene the laws of the country of final destination or any country of transit or transhipment.

Notice of suspension

(2) The suspension takes effect as soon as the Minister notifies the permit holder of the decision to suspend and provides a written report that sets out the reasons for the suspension.

Opportunity to be heard

(3) A person whose permit is suspended under subsection (1) may, within 10 days after receipt of the notice, provide the Minister with reasons why the suspension is unfounded.

DIVISION 7

SECURITY CLEARANCES

Eligibility

82. Only the following persons may submit to the Minister an application for a security clearance:

(a) a person named in an application for a producer’s licence as

(i) the proposed senior person in charge,

(ii) the proposed responsible person in charge, or

(iii) if applicable, the proposed alternate responsible person in charge;

(b) if a producer’s licence is sought for an individual, that individual;

(c) if a producer’s licence is sought for a corporation, each officer and director of the corporation;

(d) a person referred to in any of subparagraphs 32(1)(a)(i) to (iii); and

(e) the holder of a security clearance.

Application for security clearance

83. (1) In this section, “common-law partner” means any person who is cohabiting with the applicant in a relationship of a conjugal nature and has done so for a period of at least one year.

Content of application

(2) An application for a security clearance must include the following information and documentation, to be used only for the purposes of sections 84 and 85:

(a) the applicant’s usual given name used, other given names, surname, all other names used and details of any name changes;

(c) if the applicant was born in Canada, the number and province of issue of their birth certificate;

(d) if the applicant was born outside Canada, their place of birth, the port and date of entry, and, in the case of a naturalized Canadian or permanent resident, the number of the applicable certificate issued under the Citizenship Act or the Immigration and Refugee Protection Act;

(e) either of the following documents:

(i) a copy of a valid piece of photo identification issued by the government of Canada or a province, or

(ii) a copy of the applicant’s passport that includes the passport number, country of issue, expiry date and the applicant’s photograph;

(f) the addresses of all locations at which the applicant resided during the five years preceding the application;

(g) an identification of the applicant’s activities during the five years preceding the application, including the names and street addresses of the applicant’s employers and any post-secondary educational institutions attended;

(h) the dates, destination and purpose of any travel of more than 90 days outside Canada, excluding travel for government business, during the five years preceding the application;

(i) the information referred to in subsection (3) respecting the applicant’s spouse or common-law partner and any former spouses or common-law partners;

(j) the applicant’s fingerprints, taken by a member of a Canadian police force;

(k) a facial image of the applicant for identification purposes, certified by a member of a Canadian police force; and

(l) a statement signed by the licensed producer or the applicant for a producer’s licence certifying that the applicant for the security clearance requires or will require a security clearance and specifying the reasons for that requirement.

Spouse or common-law partner

(3) The information required in respect of any of the persons referred to in paragraph (2)(i) is

(a) in the case of the applicant’s spouse or common-law partner, the following information:

(i) their gender, full given name, surname and, if applicable, maiden name,

(ii) their date and place of birth and, if applicable, date of death,

(iii) if born in Canada, the number and province of issue of their birth certificate,

(iv) if born outside Canada, their place of birth, their nationality and the port and date of entry into Canada, and

(v) their present address, if known; and

(b) in the case of former spouses and common-law partners with whom the relationship ended within the preceding five years, the information referred to in subparagraphs (a)(i), (ii) and (v).

Signed by applicant

(4) The application for a security clearance is valid only if signed by the applicant.

Checks and verifications

84. On receipt of a fully completed application for a security clearance, the Minister must conduct the following checks and verifications for the purpose of assessing whether an applicant poses a risk to the integrity of the control of the production and distribution of cannabis under the Act and its regulations, including the risk of cannabis being diverted to an illicit market or use:

(a) a criminal record check in respect of the applicant; and

(b) a check of the relevant files of law enforcement agencies, including intelligence gathered for law enforcement purposes.

Minister’s decisions

85. The Minister may grant a security clearance if, in the opinion of the Minister, the information provided by the applicant and that resulting from the checks and verifications is verifiable and reliable and is sufficient for the Minister to determine, by an evaluation of the following factors, to what extent the applicant poses a risk to the integrity of the control of the production and distribution of cannabis under the Act and its regulations, including the risk of cannabis being diverted to an illicit market or use:

(a) whether the applicant has been found guilty as an adult, in the past 10 years, of

(i) a designated drug offence,

(ii) a designated criminal offence, or

(iii) an offence committed outside Canada that, if committed in Canada, would have constituted an offence referred to in subparagraph (i) or (ii);

(b) whether it is known or there are reasonable grounds to suspect that the applicant

(i) is or has been involved in, or contributes or has contributed to, illegal activities directed toward or in support of the trafficking or diversion of controlled substances or precursors, taking into account the relevance of those activities to the integrity of the control of the production and distribution of cannabis under the Act and its regulations, including the risk of cannabis being diverted to an illicit market or use,

(ii) is or has been a member of a criminal organization as defined in subsection 467.1(1) of the Criminal Code, or participates or has participated in, or contributes or has contributed to, the activities of such a group as referred to in subsection 467.11(1) of the Criminal Code, taking into account the relevance of those factors to the integrity of the control of the production and distribution of cannabis under the Act and its regulations, including the risk of cannabis being diverted to an illicit market or use,

(iii) is or has been a member of an organization that is known to be involved in or to contribute to — or in respect of which there are reasonable grounds to suspect involvement in or contribution to — activities directed toward or in support of the threat of or the use of, acts of violence against persons or property, or is or has been involved in, or is contributing to or has contributed to, the activities of such a group, taking into account the relevance of those factors to the integrity of the control of the production and distribution of cannabis under the Act and its regulations, including the risk of cannabis being diverted to an illicit market or use, or

(iv) is or has been associated with an individual who is known to be involved in or to contribute to — or in respect of whom there are reasonable grounds to suspect involvement in or contribution to — activities referred to in subparagraph (i), or is a member of an organization or group referred to in subparagraph (ii) or (iii), taking into account the relevance of those factors to the integrity of the control of the production and distribution of cannabis under the Act and its regulations, including the risk of cannabis being diverted to an illicit market or use;

(c) whether there are reasonable grounds to suspect that the applicant is in a position in which there is a risk that they be induced to commit an act or to assist or abet any person to commit an act that might constitute a risk to the integrity of the control of the production and distribution of cannabis under the Act and its regulations, including the risk of cannabis being diverted to an illicit market or use;

(d) whether the applicant has had a security clearance cancelled; and

(e) whether the applicant has filed false or misleading information relating to their application for a security clearance.

Outstanding criminal charge

86. If there is an outstanding criminal charge against the applicant that could, if the applicant were convicted, be considered by the Minister under paragraph 85(a), the Minister may decline to process the application until the charge has been disposed of by the courts, in which case the Minister must notify the applicant in writing.

Refusal to grant security clearance

87. (1) If the Minister intends to refuse to grant a security clearance, the Minister must notify the applicant in writing to that effect.

Content of notice

(2) The notice must set out the basis for the Minister’s intention and fix a period of time within which the applicant may make written representations to the Minister, which period of time must start on the day on which the notice is served or sent and must be not less than 20 days.

Opportunity to make written representations

(3) The Minister must not refuse to grant a security clearance until the written representations have been received and considered or before the period of time fixed in the notice has expired, whichever comes first. The Minister must notify the applicant in writing of any refusal.

Validity period

88. (1) The Minister must establish a period of validity for a security clearance in accordance with the level of risk posed by the applicant as determined under section 85, but the period must not exceed five years.

Extension of period

(2) If the validity period is less than five years, the Minister may extend the period to a total of five years if the Minister determines under section 85 that the holder does not pose a risk to the integrity of the control of the production and distribution of cannabis under the Act and its regulations, including the risk of cannabis being diverted to an illicit market or use.

Security clearance no longer required

89. A licensed producer must notify the Minister in writing not later than five days after the holder of a security clearance is no longer required by these Regulations to hold a security clearance.

Suspension of security clearance

90. (1) The Minister may suspend a security clearance on receipt of information that could change the Minister’s determination made under section 85.

Written notice to holder

(2) Immediately after suspending a security clearance, the Minister must notify the holder in writing of the suspension.

Content of notice

(3) The notice must set out the basis for the suspension and must fix a period of time within which the holder may make written representations to the Minister, which period of time must start on the day on which the notice is served or sent and must be not less than 20 days.

Reinstatement of clearance

(4) The Minister may reinstate the security clearance if the Minister determines under section 85 that the holder does not pose a risk to the integrity of the control of the production and distribution of cannabis under the Act and its regulations, including the risk of cannabis being diverted to an illicit market or use.

Cancellation of clearance

(5) The Minister may cancel the security clearance if the Minister is notified under section 89 that the security clearance is no longer required or determines under section 85 that the holder may pose a risk to the integrity of the control of the production and distribution of cannabis under the Act and its regulations, including the risk of cannabis being diverted to an illicit market or use. The Minister must notify the holder in writing of any cancellation.

Opportunity to be heard

(6) The Minister must not cancel the security clearance until the written representations referred to in subsection (3) have been received and considered or before the time period fixed in the notice referred to in that subsection has expired, whichever comes first.

New applications

91. If the Minister refuses to grant or cancels a security clearance, an applicant may submit a new application only if

(a) a period of five years has elapsed after the day on which the refusal or cancellation occurs; or

(b) a change has occurred in the circumstances that led to the refusal or cancellation.

Sending of notices by Minister

92. The Minister must send any notice to be given under this Division to the person at their last known address by using a method of sending that involves

(a) a means of tracking it during transit;

(b) the safekeeping of it during transit; and

(c) the keeping of an accurate record of the signatures of any persons having charge of it until it is delivered.

False or misleading information

93. It is prohibited to knowingly submit to the Minister an application containing false or misleading information in order to obtain a security clearance.

DIVISION 8

COMMUNICATION OF INFORMATION

Information concerning registered clients

94. (1) Subject to subsections (2) and (3), if a licensed producer is provided with the given name, surname, date of birth and gender of an individual by a member of a Canadian police force who requests information in the course of an investigation under the Act or these Regulations, the producer must provide as soon as feasible the following information to that Canadian police force:

(a) an indication as to whether or not the individual is

(i) a registered client of the producer, or

(ii) an individual who is responsible for a registered client of the producer; and

(b) in respect of a named individual who is a registered client of the producer, the daily quantity of dried marihuana that is specified in the medical document supporting the client’s registration.

Verification

(2) Before providing the requested information, the licensed producer must verify in a reasonable manner that the person requesting the information is a member of a Canadian police force.

Use of information

(3) Information provided under this section must be used only for the purposes of the investigation referred to in subsection (1) and for the proper administration or enforcement of the Act or these Regulations.

Information concerning health care practitioners

95. A licensed producer must provide in writing, as soon as feasible, any factual information that has been obtained about a health care practitioner under the Act or these Regulations to the licensing authority responsible for the registration or authorization of the practise of the profession

(a) in the province in which the health care practitioner is authorized to practise if the authority submits to the licensed producer a written request that sets out the practitioner’s name and address, a description of the information being sought and a statement that the information is required for the purpose of assisting an official investigation by the authority; or

(b) in a province in which the health care practitioner is not authorized to practise, if the authority submits to the licensed producer

(i) a written request for information that sets out

(A) the name and address of the practitioner, and

(B) a description of the information being sought, and

(ii) either

(A) documentation that shows that the practitioner has applied to that authority to practise in that province, or

(B) documentation that shows that the authority has reasonable grounds to believe that the practitioner is practising in that province without being authorized to do so.

Information concerning licensed producers

96. The Minister is authorized to provide any information set out in a notice referred to in section 23 or 31 to a Canadian police force or a member of a Canadian police force who requests the information in the course of an investigation under the Act or these Regulations, subject to that information being used only for the purpose of that investigation and the proper administration or enforcement of the Act or these Regulations.

Information concerning import or export permit

97. The Minister is authorized, for the purpose of verifying whether an importation or exportation of marihuana complies with an import or export permit issued under these Regulations, to provide to a customs officer in Canada any information referred to in sections 68, 69, 72, 75, 76 and 79.

Providing information to foreign organizations

98. The Minister is authorized, for the proper administration or enforcement of these Regulations and for the purpose of enabling Canada to fulfill its international obligations under section 12 of the United Nations’ Single Convention on Narcotic Drugs, 1961, to provide the following information or documents to the INCB or a competent authority:

(a) any information or document that a licensed producer is required to provide to the Minister under Part 1;

(b) any information pertaining to an activity authorized by a licence or permit issued to a licensed producer under these Regulations, including the licensed producer’s name, the nature of the authorized activity and any conditions specified in the licence or permit;

(c) in respect of cannabis that a licensed producer receives from another licensed producer or a licensed dealer, the following information:

(i) in the case of dried marihuana, its quantity and the date on which it was received, or

(ii) in the case of cannabis other than dried marihuana, the name of the substance in question, its quantity and the date on which it was received;

(d) in respect of an order that a licensed producer fills under section 117, the quantity of dried marihuana and the date on which it was shipped;

(e) in respect of an order that a licensed producer fills under subsection 128(1) or (2), the following information:

(i) in the case of dried marihuana, its quantity and the date on which it was shipped, or

(ii) in the case of cannabis other than dried marihuana, the name of the substance in question, its quantity and the date on which it was shipped;

(f) any record that a licensed producer is required to keep under subsection 139(2) or section 140 or 142; and

(g) a copy of any permit issued under section 69 or 76.

Receiving of information by Minister

99. The Minister is authorized to receive, for the purpose of the proper administration or enforcement of these Regulations, information provided by the INCB, a competent authority, the United Nations, a law enforcement agency or a peace officer.

Security clearance — Minister

100. The Minister is authorized to communicate to a law enforcement agency information concerning an application for a security clearance for the purpose of conducting the checks and verifications referred to in section 84, subject to that information being used by that agency only for that purpose.

Security clearance — law enforcement agency

101. A law enforcement agency is authorized to communicate to the Minister information relating to the checks and verifications referred to in section 84 and the factors referred to in section 85, subject to that information being used by the Minister only for the purpose specified in that section.

PART 2

REGISTRATION AND ORDERING

REGISTRATION

Eligibility

102. An individual is eligible to be a registered client of a licensed producer only if they ordinarily reside in Canada.

Registration application

103. (1) Before registering an individual as a client, a licensed producer must obtain from the individual an application that contains the following information:

(a) the applicant’s given name, surname, date of birth and gender;

(b) either,

(i) the address of the place in Canada where the applicant ordinarily resides, as well as, if applicable, the applicant’s telephone number, facsimile number and email address, or

(ii) if the applicant ordinarily resides in Canada but has no dwelling-place, the address, as well as, if applicable, the telephone number, facsimile number and email address of a shelter, hostel or similar institution, located in Canada, that provides food, lodging or other social services to the applicant;

(c) the mailing address of the place referred to in paragraph (b), if different from the address provided under that paragraph;

(d) the name of any individual who is responsible for the applicant;

(e) if the place referred to in subparagraph (b)(i) is an establishment that is not a private residence, the type and name of the establishment; and

(f) an indication as to which of the following is to be their shipping address:

(i) the address referred to in subparagraph (b)(i),

(ii) the mailing address of the place referred to in subparagraph (b)(i), or

(iii) subject to section 104, the address of the health care practitioner who provided the medical document referred to in subsection (2).

Medical document

(2) The applicant must include with the application the original of their medical document.

Statement by applicant or responsible individual

(3) The application must be signed and dated by the applicant or an individual who is responsible for the applicant and include a statement that

(a) the applicant is ordinarily resident in Canada;

(b) the information in the application and the medical document is correct and complete;

(c) the medical document has not been and is not being used to seek or obtain dried marihuana from another source;

(d) the original of the medical document accompanies the application; and

(e) the applicant will use dried marihuana only for their own medical purposes.

Statement by responsible individual

(4) If the application is signed and dated by an individual who is responsible for the applicant, it must include a statement by that individual that they are responsible for the applicant.

Homeless applicant

(5) If an application includes the information referred to in subparagraph (1)(b)(ii), the applicant must include with the application an attestation of residence signed and dated by a manager of the specified shelter, hostel or similar institution confirming that the institution provides food, lodging or other social services to the applicant.

Health care practitioner’s consent to receive dried marihuana

104. (1) If the shipping address specified in a registration application is the one referred to in subparagraph 103(1)(f)(iii), the applicant must include with the application a statement signed and dated by the health care practitioner who provided the medical document to the applicant indicating that the practitioner consents to receive dried marihuana on behalf of the applicant.

Withdrawal of consent

(2) If the applicant becomes a registered client of a licensed producer in accordance with section 106 and the health care practitioner ceases to consent to receive dried marihuana on behalf of the registered client, the practitioner must send a written notice to that effect to the registered client and the licensed producer.

No further shipments

(3) A licensed producer who receives such a notice must not send any further shipments of dried marihuana to that health care practitioner for that registered client.

Amendment to registration

(4) A registered client who receives such a notice and wishes to specify a new shipping address must submit to the licensed producer a registration amendment application in accordance with section 111.

Verification of medical document

105. A licensed producer who receives an application under section 103 and intends to register the applicant must ensure that

(a) the medical document accompanying the application meets all of the requirements of section 125;

(b) the person who provided the applicant with the medical document

(i) is a health care practitioner,

(ii) is entitled to practise their profession in the province in which the applicant consulted with that person, and

(iii) is not named in a notice issued under section 59 of the Narcotic Control Regulations; and

(c) the applicant has consulted with the person referred to in paragraph (b) and that the information set out in the medical document is correct and complete, by confirming these matters with the office of that person.

Registration of client

106. (1) Subject to section 108, a licensed producer may register an applicant as a registered client.

Registration document and unique identifier

(2) If the licensed producer registers the applicant as a client, the producer must

(a) send the client a registration document that contains the following information:

(i) the name of the producer, and

(ii) in respect of the client,

(A) the client’s given name, surname, date of birth and gender,

(B) the address referred to in subparagraph 103(1)(b)(i) or (ii),

(C) the client’s shipping address in Canada, and

(D) the expiry date of the registration; and

(b) inform the client of what will serve as the client’s unique identifier for the purpose of ordering dried marihuana.

Expiry of registration

107. A client’s registration with a licensed producer expires at the end of the period of validity of the medical document supporting the registration, as determined in accordance with subsections 125(2) and (3).

Refusal to register

108. A licensed producer must refuse to register an applicant as a client if

(a) the application does not meet the requirements of section 103;

(b) the licensed producer has reasonable grounds to believe that false or misleading information or false or falsified documents were submitted in or with the application;

(c) the requirements of section 105 are not met;

(d) the medical document that is submitted with the application is no longer valid;

(e) the given name, surname or date of birth of the applicant is different from the given name, surname or date of birth that appears on the medical document;

(f) the health care practitioner who provided the medical document to the applicant notifies the licensed producer in writing that the use of dried marihuana by the applicant is not medically recommended; or

(g) the address specified in the application under subparagraph 103(1)(b)(i) or (ii) is not in Canada.

Notice — refusal to register

109. (1) A licensed producer who refuses to register an applicant for a ground set out in section 108 or for any other reason must send the applicant a written notice of the refusal and return the medical document to the applicant without delay. The notice must indicate the reason for the refusal.

Opportunity to be heard

(2) An applicant whose application is refused under subsection (1) may, within 10 days after receipt of the notice, provide the licensed producer with reasons why the refusal is unfounded.

Cancellation of registration

110. (1) A licensed producer must cancel the registration of a client if

(a) the registered client or an individual who is responsible for the client requests the licensed producer to cancel the registration;

(b) the registered client dies, ceases to be ordinarily resident in Canada or ceases to have a shipping address in Canada;

(c) the licensed producer has reasonable grounds to believe that

(i) the registration was made on the basis of false or misleading information or false or falsified documents submitted in or with the application, or

(ii) false or misleading information was submitted in the application to amend the registration or false or falsified documents were submitted in or with that application;

(d) the health care practitioner who provided the medical document to the registered client notifies the licensed producer in writing that the use of dried marihuana by the client is not medically recommended; or

(e) the health care practitioner who provided the medical document to the registered client is named in a notice issued under section 59 of the Narcotic Control Regulations.

Time of cancellation

(2) The licensed producer must cancel the registration of the client without delay

(a) on receiving a request referred to in paragraph (1)(a) or a written notice under paragraph (1)(d); or

(b) on becoming aware of a ground referred to in paragraph (1)(b), (c) or (e) and having verified in a reasonable manner the existence of the ground.

Cancellation of all registrations

(3) A licensed producer must cancel the registrations of all of its clients without delay if the producer’s licence is revoked.

Cancellation by producer on own initiative

(4) A licensed producer may cancel the registration of a client on its own initiative.

Notice

(5) Except in the case of the death of a registered client, a licensed producer who cancels a client’s registration must without delay send a written notice of the cancellation to that person or to the individual who is responsible for that person. The notice must indicate the reason for the cancellation.

Opportunity to be heard

(6) A registered client whose registration is cancelled under this section may, within 10 days after receipt of the notice, provide the licensed producer with reasons why the cancellation is unfounded.

Medical document

(7) A licensed producer who cancels a client’s registration for any reason must not return the medical document.

Application to amend registration

111. (1) An application to amend a registration must be made to the licensed producer by the registered client when a change occurs in respect of any of the information provided under subsection 103(1).

Content of application

(2) The application must include

(a) the requested amendment;

(b) in the case of a change to any of the information provided under paragraph 103(1)(a), proof of the change; and

(c) in the case of a change to the information provided under subparagraph 103(1)(f)(iii), the statement referred to in subsection 104(1).

Statement

(3) The application must be signed and dated by the registered client or the individual who is responsible for the registered client and include a statement that

(a) the registered client is ordinarily resident in Canada; and

(b) the information contained in the application is correct and complete.

Statement by responsible individual

(4) If the application is signed and dated by the individual who is responsible for the registered client, it must include a statement by that individual that they are responsible for the registered client.

Amendment

112. (1) A licensed producer must amend a registered client’s registration if the client’s amendment application meets the requirements of subsections 111(2) and (3).

Amended registration document

(2) If the licensed producer amends the registered client’s registration, the producer must send the client an amended registration document that contains the information referred to in subparagraphs 106(2)(a)(i) and (ii).

Refusal to amend

113. (1) A licensed producer must refuse to amend a client’s registration if the licensed producer has reasonable grounds to believe that false or misleading information or false or falsified documents were submitted in or with the amendment application.

Cancellation

(2) The licensed producer must then cancel the registration in accordance with section 110.

Prohibition — transfer of medical document

114. A licensed producer must not transfer to any person a medical document on the basis of which a client has been registered.

NEW MEDICAL DOCUMENT

New application

115. A licensed producer must not sell or provide dried marihuana to a registered client on the basis of a new medical document unless the client submits to the producer a new registration application that meets the requirements of section 103.

Applicable provisions

116. Sections 104 to 109 apply to an application under section 115 in the same way that they apply to an application under section 103.

PROCESSING AN ORDER

Order required

117. (1) A licensed producer must not sell or provide dried marihuana to their registered client unless the producer has first received, from the client or the individual responsible for the client, a written order in accordance with subsection (2) or a verbal order recorded in accordance with subsection (3).

Written orders

(2) A written order for dried marihuana must

(a) be dated as of the day on which it is made;

(b) set out

(i) the given name, surname and date of birth of the registered client for whom the order is made,

(ii) the given name and surname of the individual making the order,

(iii) the shipping address specified in the client’s registration, and

(iv) the client’s unique identifier; and

(c) set out the quantity and the brand name of the dried marihuana being ordered.

Verbal orders

(3) A licensed producer who receives a verbal order must, before filling the order, record the information referred to in section 134.

Shipping

118. In filling an order referred to in section 117, a licensed producer must not transfer physical possession of the dried marihuana to the registered client or to the individual responsible for that client other than by shipping it to that person.

Refusal

119. (1) A licensed producer must refuse to fill an order referred to in section 117 if

(a) the order does not meet the requirements of section 117;

(b) any of the information that is referred to in paragraph 117(2)(b) does not correspond to the information set out in the registration document referred to in subsection 106(2);

(c) the client’s registration has expired or been cancelled;

(d) the order has been previously filled in whole or in part; or

(e) more than 30 days have elapsed since the date referred to in paragraph 117(2)(a) or 134(a).

Notice of refusal to fill order

(2) The licensed producer must send the registered client a written notice of the reason for the refusal.

30-day limit — registered client

120. (1) A licensed producer must not sell or provide to a registered client in any 30-day period a total quantity of dried marihuana that exceeds 30 times the daily quantity referred to in paragraph 125(1)(d).

Date of sale

(2) A quantity of dried marihuana is deemed to be sold or provided, for the purposes of subsection (1), on the date that the licensed producer reasonably anticipates that it will be received by the registered client.

Return

(3) If the registered client returns to the licensed producer dried marihuana that the producer sold or provided to the client, the producer may replace the returned marihuana with an equal quantity, to a maximum of 150 g.

Exclusion

(4) The quantity of any dried marihuana that the licensed producer provides to the registered client to replace an equal quantity of returned dried marihuana is to be excluded for the purpose of calculating the total quantity referred to in subsection (1).

PART 3

REGISTERED CLIENTS AND OTHER AUTHORIZED USERS

Proof of authority to possess

121. On demand, an individual who, in accordance with these Regulations, obtains dried marihuana for their own medical purposes must show to a police officer proof that they are authorized to possess the dried marihuana.

Prohibition — obtaining from more than one source

122. It is prohibited to seek or obtain dried marihuana from more than one source at a time on the basis of the same medical document.

Return

123. (1) An individual who, in accordance with these Regulations, obtains dried marihuana for their own medical purposes or for those of another individual for whom they are responsible may return the dried marihuana to the person who sold or provided it to them if that person accepts the return of that dried marihuana.

Return by shipping

(2) If the individual returns the dried marihuana by means of shipping it to the person who sold or provided it to them, they must

(a) ship it in a package that meets the requirements of paragraph 67(1)(b); and

(b) use a shipping method that meets the requirements of paragraph 67(1)(c).

Return to licensed producer

(3) A registered client who returns dried marihuana to the licensed producer who sold or provided it to them must do so by shipping it to the producer.

PART 4

HEALTH CARE PRACTITIONERS

Authorized activities

124. In addition to being authorized to possess dried marihuana in accordance with section 3, a health care practitioner may perform the following activities in regard to a person who is under their professional treatment:

(a) sell, provide or administer dried marihuana; or

(b) provide a medical document.

Medical document

125. (1) A medical document provided by a health care practitioner to a person who is under their professional treatment must indicate

(a) the practitioner’s given name, surname, profession, business address and telephone number, facsimile number and email address, if applicable, the province in which the practitioner is authorized to practise their profession and the number assigned by the province to that authorization;

(b) the person’s given name, surname and date of birth;

(c) the address of the location at which the person consulted with the practitioner;

(d) the daily quantity of dried marihuana to be used by the person, expressed in grams; and

(e) the period of use.

Period of use

(2) The period of use referred to in paragraph (1)(e)

(a) must be specified in the medical document as a number of days, weeks or months, which must not exceed one year; and

(b) begins on the day on which the document is signed by the health care practitioner.

Validity of medical document

(3) A medical document is valid for the period of use specified in it.

Attestation

(4) The medical document must be signed and dated by the health care practitioner providing it and must attest that the information in the document is correct and complete.

Labelling of dried marihuana

126. A health care practitioner who sells or provides dried marihuana to a person under their professional treatment must

(a) sell or provide it in the immediate container in which it was sold or provided to the practitioner by a licensed producer and ensure that the immediate container carries the label required under section 60;

(b) affix to the immediate container a separate label that contains the following information:

(i) the given name and surname of the person under the health care practitioner’s professional treatment,

(ii) the health care practitioner’s given name, surname and profession,

(iii) the daily quantity of dried marihuana to be used by the person, expressed in grams, and

(iv) the date on which the dried marihuana was sold or provided;

(c) ensure that the label required under paragraph (b) does not cover any portion of the label referred to in paragraph (a);

(d) provide the person with a copy of the current version of the document entitled Information on the Use of Marihuana for Medical Purposes, published by the Department of Health; and

(e) provide the person with a separate document containing the information referred to in paragraph (b).

30-day limit

127. (1) A health care practitioner must not sell or provide to a person under their professional treatment in any 30-day period a total quantity of dried marihuana that exceeds 30 times the daily quantity referred to in subparagraph 126(b)(iii).

Additional limit

(2) A health care practitioner must not, at any one time, sell or provide to a person under their professional treatment a quantity of dried marihuana that exceeds 150 g.

Return

(3) If the person returns to the health care practitioner dried marihuana that the practitioner sold or provided to the person, the practitioner may, subject to subsection (2), replace the dried marihuana with an equal quantity.

Exclusion

(4) The quantity of any dried marihuana that the health care practitioner provides to the person to replace the returned marihuana is to be excluded for the purpose of calculating the total quantity referred to in subsection (1).

PART 5

SALE OR PROVISION BY A LICENSED PRODUCER
TO A PERSON OTHER THAN A REGISTERED CLIENT

Order required — cannabis

128. (1) A licensed producer must not sell or provide cannabis to a person referred to in subsection 11(2) unless the producer has first received a written order in accordance with subsection (3) from

(a) in the case of a licensed dealer or another licensed producer, a person who is authorized to place an order for cannabis on behalf of that dealer or producer; and

(b) in any other case, the person to whom the cannabis is to be sold or provided in accordance with the Act and these Regulations.

Order required — dried marihuana

(2) A licensed producer must not sell or provide dried marihuana to a person referred to in any of paragraphs 11(4)(b) to (e) unless the producer has first received a written order in accordance with subsection (3) from

(a) in the case of a hospital, a pharmacist practising in the hospital or a health care practitioner authorized to place orders for dried marihuana on behalf of the hospital; and

(b) in any other case, the person to whom the dried marihuana is to be sold or provided in accordance with the Act and these Regulations.

Requirements

(3) The written order must

(a) be signed and dated by a person described in subsection (1) or (2) and indicate their name;

(b) indicate the shipping address in Canada; and

(c) specify whether dried marihuana or cannabis other than dried marihuana is being ordered and include the following information:

(i) in the case of dried marihuana, its quantity and brand name, or

(ii) in the case of cannabis other than dried marihuana, the substance ordered, its quantity, description and, if applicable, brand name.

Signature

(4) A licensed producer must verify in a reasonable manner the identity of the person who placed the order if the signature on the order is not known to the producer.

Shipping

129. In filling an order referred to in subsection 128(2), a licensed producer must not transfer physical possession of the dried marihuana to the person to whom it is sold or provided other than by shipping it to them.

Refusal

130. (1) A licensed producer must refuse to fill an order referred to in subsection 128(1) or (2) if

(a) the order does not meet the requirements of subsection 128(3); or

(b) in the circumstances described in subsection 128(4), the identity of the person cannot be verified.

Notice of refusal to fill order

(2) The licensed producer must send the person who placed the order a written notice of the reason for the refusal.

PART 6

RECORD KEEPING BY LICENSED PRODUCERS

TRANSACTIONS

Cannabis received

131. A licensed producer who receives cannabis from another licensed producer or a licensed dealer must record the following information:

(a) the name of the licensed producer or licensed dealer from whom the cannabis was received;

(b) the address of the site at which the cannabis was received;

(c) an indication as to whether dried marihuana or cannabis other than dried marihuana was received, as well as the following information:

(i) in the case of dried marihuana, the quantity and, if applicable, brand name, or

(ii) in the case of cannabis other than dried marihuana, the substance ordered, its quantity, description and, if applicable, brand name; and

(d) the date on which the cannabis was received.

Imported marihuana

132. A licensed producer who imports marihuana must retain a copy of the declaration required by section 72 and of the export permit issued by a competent authority in the country of export.

Exported marihuana

133. A licensed producer who exports marihuana must retain a copy of the declaration required by section 79 and of the import permit issued by a competent authority in the country of final destination.

Record of verbal order

134. A licensed producer who receives a verbal order referred to in subsection 117(3) must record the following information:

(a) the date on which the order is received and the order number;

(b) the information referred to in paragraphs 117(2)(b) and (c); and

(c) the name of the individual recording the order.

Filling of order from registered client

135. (1) A licensed producer who fills an order referred to in section 117 must record the following information:

(a) the given name, surname and date of birth of the registered client for whom the order is placed;

(b) the given name and surname of the individual placing the order;

(c) the quantity, brand name and lot number of the dried marihuana sold or provided;

(d) the date on which the order was received;

(e) the date on which the dried marihuana was shipped; and

(f) the address to which the dried marihuana was shipped.

Retention of documents

(2) A licensed producer must retain a written order referred to in subsection 117(2) or a written record of a verbal order referred to in subsection 117(3).

Refusal to fill an order

(3) A licensed producer who refuses to fill an order referred to in section 117 must retain a copy of the written notice referred to in subsection 119(2).

Dried marihuana returned by registered client

136. A licensed producer who receives dried marihuana that is returned in accordance with section 123 must record the following information:

(a) the given name and surname of the registered client who returned it;

(b) the address of the site at which it was received;

(c) its quantity and brand name; and

(d) the date on which it was received.

Order from person other than registered client

137. (1) A licensed producer who fills an order referred to in subsection 128(1) or (2) must record the following information:

(a) the name of the person to whom the cannabis or dried marihuana was sold or provided;

(b) the shipping address;

(c) an indication as to whether dried marihuana or cannabis other than dried marihuana was ordered, as well as the following information:

(i) in the case of dried marihuana, its quantity and, if applicable, brand name, or

(ii) in the case of cannabis other than dried marihuana, the substance ordered, its quantity, description and, if applicable, brand name; and

(d) the date on which the cannabis or dried marihuana was shipped.

Refusal to fill an order

(2) A licensed producer who refuses to fill an order referred to in subsection 128(1) or (2) must retain a copy of the written notice referred to in subsection 130(2).

CLIENT REGISTRATIONS

Information

138. (1) A licensed producer must record the following information:

(a) details of the verifications performed under subsection 94(2), section 105 and paragraph 110(2)(b); and

(b) what will serve as the unique identifier referred to in paragraph 106(2)(b) and the manner in which and the date on which it was communicated to the registered client.

Documents

(2) A licensed producer must retain the following documents:

(a) a registration application and a medical document referred to in section 103;

(b) a copy of a registration document referred to in paragraph 106(2)(a);

(c) an application for the amendment of a registration referred to in section 111;

(d) a copy of an amended registration document referred to in subsection 112(2); and

(e) a copy of a written notice referred to in section 109 or subsection 110(5).

PRODUCTION AND INVENTORY

Good production practices

139. (1) A licensed producer must keep

(a) records demonstrating that each lot or batch of dried marihuana that they sold or provided to a person referred to in subsection 11(4) was produced, packaged and labelled in accordance with Divisions 4 and 5 of Part 1;

(b) a list of all brand names of dried marihuana that they produced, packaged or labelled;

(c) a copy of the sanitation program referred to in section 51 in use at their site;

(d) a copy of the standard operating procedures referred to in section 52 in use at their site;

(e) documentation concerning the control system referred to in section 53 in use at their site;

(f) a description of the qualifications of the quality assurance person in respect of the matters referred to in subparagraph 54(1)(a)(ii); and

(g) records of every complaint referred to in paragraph 54(1)(b) and of any corrective action taken.

Sale or provision

(2) A licensed producer who sells or provides dried marihuana

(a) must keep records of any testing conducted by or on behalf of the licensed producer in respect of any lot or batch of the dried marihuana;

(b) must keep records of information necessary for the system of control referred to in section 53; and

(c) must keep a record of the information that the Minister is required by section 56 to be provided with in respect of the recall of dried marihuana.

Sown, harvested, dried, packaged and destroyed marihuana

140. A licensed producer must keep a record of the following information concerning each lot or batch of marihuana that they sow, harvest, dry, package or destroy:

(a) the date on which marihuana seeds are sown and their total net weight on that date;

(b) the date on which marihuana is harvested and its net weight on that date;

(c) the date on which the drying process for marihuana is completed and its net weight on that date;

(d) the date on which marihuana is packaged and its net weight on that date; and

(e) the date on which marihuana is destroyed and its net weight on that date.

Destroyed cannabis

141. (1) A licensed producer must keep, for each instance in which they destroy cannabis, a record of the following information:

(a) the date on which the cannabis was destroyed, the name of the substance destroyed and its net weight on that date;

(b) the location of destruction;

(c) a brief description of the method of destruction;

(d) the names of the witnesses to the destruction that are referred to in paragraph 20(2)(b) and the basis on which they are qualified to be witnesses under subsection 20(3); and

(e) if applicable, the name of the person who accompanied the cannabis in accordance with subsection 20(4).

Statement by witnesses

(2) A licensed producer must keep, for each instance in which they destroy cannabis, a statement signed and dated by each of the witnesses referred to in paragraph 20(2)(b) stating that they have witnessed the destruction and that the cannabis was destroyed in accordance with section 20.

Inventory

142. A licensed producer must keep a record of the net weight of each of the following that are in inventory at the site specified in their licence at the end of each quarter of the calendar year:

(a) marihuana seeds;

(b) harvested marihuana in respect of which the drying process has not been completed, other than marihuana referred in paragraph (d) or (e);

(c) harvested marihuana in respect of which the drying process has been completed, other than marihuana referred in paragraph (d) or (e);

(d) marihuana that is destined for destruction;

(e) packaged marihuana; and

(f) cannabis other than marihuana.

GENERAL OBLIGATIONS

Manner of keeping records

143. (1) A licensed producer must ensure that the records, documents and information referred to in this Part

(a) are kept in a manner that will enable an audit of them to be made in a timely manner; and

(b) are available at the site specified in their licence.

Retention period

(2) A licensed producer must retain the records, documents and information for the following periods:

(a) in the case of information that the producer is required to record under sections 131, 134, 136, 140 and 142 and subsections 135(1), 137(1) and 138(1), for a period of two years after the day on which the information is recorded;

(b) in the case of the documents referred to in sections 132 and 133, for a period of two years after the day on which the declaration referred to in section 72 or 79, as applicable, is sent to the Minister;

(c) in the case of the documents referred to in subsections 135(2) and paragraphs 138(2)(a) to (d), for a period of two years after the day on which the producer obtained them or, in the case of documents made by the producer, the day on which they were made;

(d) in the case of the records referred to in paragraphs 139(1)(a) and (2)(b), for a period of two years following the date of the last sale or provision of any portion of the lot or batch of dried marihuana to a person referred to in subsection 11(4);

(e) in the case of a document referred to in paragraph 139(1)(b), (c), (d) or (e), for the period during which it is current and for an additional two years after the day on which it is replaced by a new version;

(f) in the case of a document referred to in paragraph 139(1)(f), for the period during which the quality assurance person acts in that capacity and for an additional two years after the day on which the person ceases to do so;

(g) in the case of the records referred to in paragraph 139(1)(g), for a period of two years after the day on which the complaint was recorded;

(h) in the case of the records referred to in paragraph 139(2)(a), for a period of two years after the date of the last sale or provision of any portion of the lot or batch, other than a sale or provision for destruction;

(i) in the case of the records referred to in paragraph 139(2)(c), for a period of two years after the day on which the dried marihuana was recalled;

(j) in the case of the records and documents referred to in section 141, for a period of two years after the day on which the cannabis was destroyed; and

(k) in the case of a written notice that the producer is required to send under these Regulations, for a period of two years after the date on which the notice is sent.

Case reports

(3) A licensed producer must retain the serious adverse reaction case reports referred to in subsection 57(1) for a period of 25 years after the day on which they were made.

Information required by Minister

144. A licensed producer must provide the Minister with any information that the Minister may require in respect of the records, documents and information referred to in this Part, in the form and at the times that the Minister specifies.

PART 7

CONSEQUENTIAL AMENDMENTS

FOOD AND DRUG REGULATIONS

145. The definition “Security Directive” in subsection G.01.001(2) of the Food and Drug Regulations (see footnote 8) is replaced by the following:

“Security Directive” means the Directive on Physical Security Requirements for Controlled Substances (Security Requirements for the Storage of Controlled Substances) published by the Department, as amended from time to time; (Directive en matière de sécurité)

NARCOTIC CONTROL REGULATIONS

146. (1) The definition “Security Directive” in section 2 of the Narcotic Control Regulations (see footnote 9) is replaced by the following:

“Security Directive” means the Directive on Physical Security Requirements for Controlled Substances (Security Requirements for the Storage of Controlled Substances) published by the Department, as amended from time to time; (Directive en matière de sécurité)

(2) Section 2 of the Regulations is amended by adding the following in alphabetical order:

“dried marihuana” has the same meaning as in subsection 1(1) of the Marihuana for Medical Purposes Regulations; (marihuana séchée )

“health care practitioner” has the same meaning as in subsection 1(1) of the Marihuana for Medical Purposes Regulations; (praticien de la santé)

“licensed producer” has the same meaning as in subsection 1(1) of the Marihuana for Medical Purposes Regulations; (producteur autorisé)

“marihuana” has the same meaning as in subsection 1(1) of the Marihuana for Medical Purposes Regulations; (marihuana)

“medical marihuana document” has the same meaning as “medical document” in subsection 1(1) of the Marihuana for Medical Purposes Regulations; (document médical concernant la marihuana)

(2) No licensed dealer shall import or export a narcotic without a permit.

(3) No licensed dealer shall sell or provide dried marihuana to a practitioner, a pharmacist or a hospital.

(4) No licensed dealer shall cultivate, propagate or harvest marihuana other than for scientific purposes.

(5) Subsection (4) does not apply to marihuana produced by a licensed dealer under contract with Her Majesty in right of Canada.

147.1 Subsection 9.4(1) of the Regulations is amended by adding the following after paragraph (d):

(d.1) except in the case of marihuana produced by a licensed dealer under contract with Her Majesty in right of Canada, an activity for which the licence is requested is the cultivation, propagation or harvesting of marihuana other than for scientific purposes;

148. (1) The portion of subsection 24(2) of the Regulations before paragraph (a) is replaced by the following:

(2) Subject to subsection (2.1) and section 25, a licensed dealer may sell or provide any narcotic other than diacetylmorphine (heroin) or methadone to

(2) Section 24 of the Regulations is amended by adding the following after subsection (2):

(2.1) No licensed dealer shall sell or provide dried marihuana to a person referred to in paragraph (2)(b), (c) or (d).

(3) Subsection 24 of the Regulations is amended by adding the following after subsection (4):

(5) A licensed dealer may sell or provide cannabis, as defined in subsection 1(1) of the Marihuana for Medical Purposes Regulations, to a licensed producer.

149. (1) The portion of subsection 27(1) of the Regulations before paragraph (a) is replaced by the following:

27. (1) Subject to this section, a licensed dealer may, in accordance with the terms and conditions of their dealer’s licence, sell or provide a narcotic other than diacetylmorphine (heroin) or methadone to a person referred to in subsection 24(2), sell or provide methadone to a person referred to in subsection 24(3), sell or provide diacetylmorphine (heroin) to a person referred to in subsection 24(4) and sell or provide cannabis, as defined in subsection 1(1) of the Marihuana for Medical Purposes Regulations, to a person referred to in subsection 24(5) if the licensed dealer has, on the premises specified in the licence, received

(2) The portion of subsection 27(2) of the Regulations before paragraph (a) is replaced by the following:

(2) A licensed dealer who has received an order referred to in paragraph (1)(a) may sell or provide a narcotic other than diacetylmorphine (heroin) or methadone to a person referred to in subsection 24(2), sell or provide methadone to a person referred to in subsection 24(3), sell or provide diacetylmorphine (heroin) to a person referred to in subsection 24(4) and sell or provide cannabis, as defined in subsection 1(1) of the Marihuana for Medical Purposes Regulations, to a person referred to in subsection 24(5) if

(3) Subparagraph 27(2)(a)(i) of the Regulations is replaced by the following:

(i) if the narcotic is to be sold or provided to a person referred to in paragraph 24(2)(a), (b), (c) or (e), 24(3)(a), (b), or (d), 24(4)(a) or (c) or subsection 24(5), by that person, or

150. The portion of section 30 of the Regulations before paragraph (a) is replaced by the following:

30. A pharmacist who receives a narcotic from a licensed dealer or a licensed producer shall immediately enter in a book, register or other record maintained for such purposes, the following:

151. (1) Subsection 31(1) of the Regulations is replaced by the following:

31. (1) No pharmacist shall sell or provide narcotics except in accordance with this section and sections 34 to 36.

(2) The portion of subsection 31(2) of the Regulations before paragraph (a) is replaced by the following:

(2) A pharmacist may sell or provide a narcotic other than methadone or dried marihuana to a person

(3) Section 31 of the Regulations is amended by adding the following after subsection (2.1):

(2.2) A pharmacist may sell or provide dried marihuana to a person

(a) if the person is exempted under section 56 of the Act with respect to the possession of the dried marihuana;

(b) if the pharmacist has first received a written order or prescription for it signed and dated by a health care practitioner and the pharmacist has verified the signature of the practitioner, if the signature is not known to the pharmacist; or

(c) if the person has provided the pharmacist with a medical marihuana document and the pharmacist has verified the signature of the health care practitioner who provided the document, if the signature is not known to the pharmacist.

152. The Regulations are amended by adding the following after section 31:

31.1 A pharmacist must not, at any one time, sell or provide to a person under paragraph 31(2.2)(b) or (c) a quantity of dried marihuana that exceeds 150 g.

31.2 A pharmacist must not sell or provide to a person under paragraph 31(2.2)(b) in any 30-day period, a total quantity of dried marihuana that exceeds the quantity required for a 30-day period, based on the dosing schedule set out on the written order or prescription.

31.3 A pharmacist who sells or provides dried marihuana to a person in accordance with paragraph 31(2.2)(c) must

(a) sell or provide it in the immediate container in which it was sold or provided to the pharmacist by a licensed producer and ensure that the immediate container carries the label required under section 60 of the Marihuana for Medical Purposes Regulations;

(b) affix to the immediate container a separate label that contains the following information:

(i) the given name and surname of the person,

(ii) the given name, surname and profession of the health care practitioner who provided the medical marihuana document,

(iii) the daily quantity of dried marihuana to be used by the person, expressed in grams, as specified in the medical marihuana document,

(iv) the date on which the medical marihuana document was signed and the period of use specified in it, and

(v) the date on which the dried marihuana was sold or provided;

(c) ensure that the label required under paragraph (b) does not cover any portion of the label referred to in paragraph (a);

(d) provide to the person a copy of the current version of the document entitled Information on the Use of Marihuana for Medical Purposes, published by the Department of Health; and

(e) provide to the person a separate document containing the information referred to in paragraph (b).

31.4 A pharmacist must not sell or provide to a person under paragraph 31(2.2)(c) in any 30-day period, a total quantity of dried marihuana that exceeds 30 times the daily quantity referred to in subparagraph 31.3(b)(iii).

31.5 A pharmacist must not sell or provide to a person under paragraph 31(2.2)(c) a total quantity of dried marihuana that exceeds the quantity determined by the formula

A × B

where

A is the number of days remaining in the period of use specified in the medical marihuana document, as of the date of the first sale or provision by the pharmacist in accordance with that document; and

B is the daily quantity referred to in subparagraph 31.3(b)(iii).

31.6 (1) If a person returns to a pharmacist dried marihuana that the pharmacist sold or provided to the person under subsection 31(2.2), the pharmacist may, subject to section 31.1, replace the dried marihuana with an equal quantity.

(2) In the case of the return of dried marihuana that was sold or provided to a person referred to in paragraph 31(2.2)(b), the quantity of any dried marihuana that the pharmacist provides to the person to replace the returned marihuana is to be excluded for the purpose of calculating the total quantity referred to in section 31.2.

(3) In the case of the return of dried marihuana that was sold or provided to a person referred to in paragraph 31(2.2)(c), the quantity of any dried marihuana that the pharmacist provides to the person to replace the returned marihuana is to be excluded for the purpose of calculating the total quantity referred to in section 31.4 or 31.5.

31.7 A pharmacist must not sell or provide dried marihuana to a person under paragraph 31(2.2)(c) after the expiry of the period of use specified in the medical marihuana document.

153. Section 35 of the Regulations is amended by adding the following after subsection (2):

(3) If the narcotic is dried marihuana, the pharmacist must

(a) provide it in the immediate container in which it was sold or provided to the pharmacist by a licensed producer and ensure that the immediate container carries the label required under section 60 of the Marihuana for Medical Purposes Regulations; and

(b) provide a copy of the current version of the document entitled Information on the Use of Marihuana for Medical Purposes, published by the Department of Health.

154. Section 38 of the Regulations is replaced by the following:

38. If, in accordance with a written order or prescription or a medical marihuana document, a pharmacist dispenses a narcotic, other than dextropropoxyphene or a verbal prescription narcotic, the pharmacist shall immediately enter in a book, register or other record maintained for such purposes

(a) the name and address of the person named in the order, prescription or medical marihuana document;

(d) the name or initials of the pharmacist who sold or provided the narcotic;

(e) the date on which the narcotic was sold or provided; and

(f) the number assigned to the order, prescription or medical marihuana document.

155. Subsection 40(1) of the Regulations is replaced by the following:

40. (1) A pharmacist shall maintain a special narcotic prescription file in which shall be filed in sequence as to date and number all written orders or prescriptions or medical marihuana documents for narcotics dispensed and the written record of all verbal prescription narcotics dispensed in accordance with a verbal order or prescription as provided in section 39.

156. Section 45 of the Regulations is amended by adding the following after subsection (1):

(1.1) A pharmacist may, on receiving a written order for dried marihuana signed and dated by

(a) the licensed producer who sold or provided the dried marihuana, return it to the producer;

(b) a licensed producer who is authorized to destroy dried marihuana other than dried marihuana that the producer produced, sold or provided, sell or provide it to the producer for destruction; or

(c) a licensed dealer who is authorized to destroy dried marihuana, sell or provide it to the dealer for destruction.

157. (1) The portion of section 46 of the Regulations before paragraph (a) is replaced by the following:

46. The Minister shall provide in writing any factual information about a pharmacist that has been obtained under the Act, these Regulations or the Marihuana for Medical Purposes Regulations to the provincial professional licensing authority responsible for the registration or authorization of the person to practise their profession

(2) Clause 46(a)(ii)(C) of the Regulations is replaced by the following:

(C) contravened a provision of these Regulations or the Marihuana for Medical Purposes Regulations; or

158. (1) The portion of subsection 48(1) of the Regulations before paragraph (a) is replaced by the following:

48. (1) In the circumstances described in subsection (2), the Minister must issue a notice to the persons and authorities specified in subsection (3) advising them that licensed dealers, pharmacists practising in the notified pharmacies and licensed producers must not sell or provide to the pharmacist named in the notice one or more of the following:

(2) Paragraph 48(2)(c) of the Regulations is replaced by the following:

(c) been found guilty in a court of law of a designated drug offence or of an offence under these Regulations or the Marihuana for Medical Purposes Regulations.

(3) Subsection 48(3) of the Regulations is amended by adding the following after paragraph (a):

(a.1) all licensed producers;

(4) Paragraph 48(4)(f) of the Regulations is replaced by the following:

(f) is unable to account for the quantity of narcotic for which the pharmacist was responsible under these Regulations or the Marihuana for Medical Purposes Regulations.

159. The portion of section 49 of the Regulations before paragraph (a) is replaced by the following:

49. The Minister must provide the licensed dealers, licensed producers, pharmacies, and provincial professional licensing authorities who were issued a notice under subsection 48(1) with a notice of retraction of that notice if

160. (1) Subsection 53(1) of the Regulations is replaced by the following:

53. (1) No practitioner shall administer a narcotic to a person or animal, or prescribe, sell or provide a narcotic for a person or animal, except as authorized under this section, the Marihuana Medical Access Regulations or the Marihuana for Medical Purposes Regulations.

(2) Subsection 53(1) of the Regulations, as enacted by subsection (1), is replaced by the following:

53. (1) No practitioner shall administer a narcotic to a person or animal, or prescribe, sell or provide a narcotic for a person or animal, except as authorized under this section or the Marihuana for Medical Purposes Regulations.

(3) The portion of subsection 53(2) of the Regulations before paragraph (a) is replaced by the following:

(2) Subject to subsections (3) to (6), a practitioner may administer a narcotic to a person or animal, or prescribe, sell or provide a narcotic for a person or animal, if

(4) Section 53 of the Regulations is amended by adding the following after subsection (4):

(5) No practitioner other than a health care practitioner shall administer dried marihuana to a person or prescribe, sell or provide dried marihuana for a person.

(6) No practitioner shall administer dried marihuana to an animal or prescribe, sell or provide dried marihuana for an animal.

161. (1) The portion of subsection 54(1) of the Regulations before paragraph (a) is replaced by the following:

54. (1) A practitioner who sells or provides a narcotic other than dried marihuana to a person for self-administration or for administration to an animal shall, whether or not the practitioner charges for the narcotic, keep a record showing the name and quantity of the narcotic sold or provided, the name and address of the person to whom it was sold or provided and the date on which it was sold or provided, if the quantity of the narcotic exceeds

(2) Section 54 of the Regulations is amended by adding the following after subsection (1):

(1.1) A health care practitioner who sells or provides dried marihuana to a person for self-administration shall, whether or not the practitioner charges for the dried marihuana, keep a record showing the quantity of the dried marihuana sold or provided, the name and address of the person to whom it was sold or provided and the date on which it was sold or provided.

162. Paragraphs 55(a) and (b) of the Regulations are replaced by the following:

(a) furnish to the Minister on request any information that the Minister may require respecting

(i) the use by the practitioner of narcotics received — including the administering, selling or providing of them to a person,

(b) produce to an inspector on request any records that these Regulations or the Marihuana for Medical Purposes Regulations require the practitioner to keep;

163. (1) The portion of section 57 of the Regulations before paragraph (a) is replaced by the following:

57. The Minister shall provide in writing any factual information about a practitioner that has been obtained under the Act, these Regulations or the Marihuana for Medical Purposes Regulations to the provincial professional licensing authority responsible for the registration or authorization of the person to practise their profession

(2) Clause 57(a)(ii)(C) of the Regulations is replaced by the following:

(C) contravened a provision of these Regulations or the Marihuana for Medical Purposes Regulations; or

164. (1) The portion of section 58 of the Regulations before paragraph (a) is replaced by the following:

58. A practitioner may make a written request to the Minister to send to licensed dealers, licensed producers and pharmacies a notice, issued under section 59, advising them of one or more of the following requirements:

(2) Section 58 of the Regulations is amended by striking out “or” at the end of paragraph (c) and by adding the following after paragraph (c):

(c.1) in the case of a health care practitioner, pharmacists practising in the notified pharmacies must not sell or provide dried marihuana on the basis of a medical marihuana document provided by that practitioner;

(3) Section 58 of the Regulations is amended by adding the following after paragraph (d):

(e) a licensed producer must not sell or provide dried marihuana on the basis of a medical marihuana document provided by that practitioner;

(f) a licensed producer must not sell or provide dried marihuana on the basis of an authorization to possess issued under the Marihuana Medical Access Regulations on the basis of a medical declaration made under those Regulations by that practitioner; or

(g) a licensed producer must not sell or provide dried marihuana on the basis of a medical declaration made under the Marihuana Medical Access Regulations by that practitioner.

(4) Section 58 of the Regulations, as amended by subsection (3), is amended by striking out “or” at the end of paragraph (f), by adding “or” at the end of paragraph (e) and by repealing paragraph (g).

(5) Section 58 of the Regulations, as amended by subsections (3) and (4), is amended by striking out “or” at the end of paragraph (e), by adding “or” at the end of paragraph (d) and by repealing paragraph (f).

165. (1) Subsection 59(1) of the Regulations is amended by striking out “or” at the end of paragraph (a) and by adding the following after paragraph (a):

(a.1) in the case of a health care practitioner, licensed producers must not sell or provide dried marihuana to the practitioner named in the notice;

(2) Subsection 59(1) of the Regulations is amended by adding “or” at the end of paragraph (b) and by adding the following after paragraph (b):

(c) in the case of a health care practitioner, pharmacists practising in the notified pharmacies must not sell or provide dried marihuana on the basis of a medical marihuana document provided by that practitioner.

(3) Paragraph 59(2)(c) of the Regulations is replaced by the following:

(c) been found guilty in a court of law of a designated drug offence or of an offence under these Regulations or the Marihuana for Medical Purposes Regulations.

(4) Subsection 59(3) of the Regulations is amended by adding the following after paragraph (a):

(a.1) all licensed producers;

(5) Subsection 59(3) of the Regulations is amended by striking out “and” at the end of paragraph (d), by adding “and” at the end of paragraph (e) and by adding the following after paragraph (e):

(f) in the case of a health care practitioner, all pharmacies in an adjacent province in which dried marihuana may be sold or provided on the basis of a medical marihuana document provided by that practitioner.

(6) Subsection 59(4) of the Regulations is amended by adding the following after paragraph (a):

(a.1) has performed an activity referred to in section 124 of the Marihuana for Medical Purposes Regulations otherwise than in accordance with that section or has contravened any of sections 125 to 127 of those Regulations;

(7) Paragraph 59(4)(f) of the Regulations is replaced by the following:

(f) is unable to account for the quantity of narcotic for which the practitioner was responsible under these Regulations or the Marihuana for Medical Purposes Regulations.

166. The portion of section 60 of the Regulations before paragraph (a) is replaced by the following:

60. The Minister must provide the licensed dealers, licensed producers, pharmacies and provincial professional licensing authorities who were issued a notice under subsection 59(1) with a notice of retraction of that notice if

167. Paragraph 63(a) of the Regulations is amended by striking out “and” at the end of subparagraph (vi), by adding “and” at the end of subparagraph (vii) and by adding the following after subparagraph (vii):

(viii) the name of the health care practitioner providing a medical marihuana document, the date on which the document was signed and the daily quantity and period of use specified in it;

168. Section 65 of the Regulations is amended by adding the following after subsection (2):

(2.1) On receipt of a medical marihuana document signed and dated by a health care practitioner, the person in charge of a hospital may permit dried marihuana to be administered to a person under treatment as an in-patient or out-patient of the hospital, or to be sold or provided to the person.

169. Subsection 73(2) of the Regulations is replaced by the following:

(2) The Minister may communicate to a nursing statutory body any information concerning any member of that body obtained under the Act, these Regulations or the Marihuana for Medical Purposes Regulations.

BENZODIAZEPINES AND OTHER TARGETED SUBSTANCES REGULATIONS

170. The definition “Security Directive” in subsection 1(1) of the Benzodiazepines and Other Targeted Substances Regulations (see footnote 10) is replaced by the following:

“Security Directive”
« Directive en matière de sécurité »

“Security Directive” means the Directive on Physical Security Requirements for Controlled Substances (Security Requirements for the Storage of Controlled Substances) published by the Department, as amended from time to time.

MARIHUANA MEDICAL ACCESS REGULATIONS

171. Subsection 1(1) of the Marihuana Medical Access Regulations (see footnote 11) is amended by adding the following in alphabetical order:

“licensed producer” has the same meaning as in subsection 1(1) of the Marihuana for Medical Purposes Regulations. (producteur autorisé)

“registered client” has the same meaning as in subsection 1(1) of the Marihuana for Medical Purposes Regulations. (client inscrit)

172. Paragraph 5(1)(e) of the Regulations is replaced by the following:

(e) in the case of an application for an authorization to posses that is submitted on or before September 30, 2013 or an application for the renewal of an authorization to possess, that the authorization is sought in respect of marihuana to be

(i) produced by the applicant or a designated person, in which case the designated person must be named, or

(ii) obtained under section 70.2 from a licensed dealer producing marihuana under contract with Her Majesty in right of Canada or obtained from a medical practitioner under section 70.4;

(e.1) in the case of an application for an authorization to possess that is submitted after September 30, 2013, that the authorization is sought in respect of marihuana to be obtained under section 70.2 from a licensed dealer producing marihuana under contract with Her Majesty in right of Canada or obtained from a medical practitioner under section 70.4;

173. Subsection 11(2) of the Regulations is amended by striking out “and” at the end of paragraph (f), by adding “and” at the end of paragraph (g) and by adding the following after paragraph (g):

(h) the reference date referred to in section 13.1.

174. Section 13 of the Regulations is replaced by the following:

13. (1) Subject to subsection (2), an authorization to possess expires 12 months after its date of issue or, if a shorter period is specified in the application for the authorization under paragraph 6(1)(d), at the end of that period.

(2) An authorization to possess expires not later than March 31, 2014.

(3) For greater certainty, subsection (2) applies

(a) even if the date of expiry indicated on the authorization to possess is later than March 31, 2014; and

(b) whether or not the authorization is issued before or after the day on which that subsection comes into force.

13.1 (1) For the purpose of paragraph 11(2)(h), the reference date that is to be indicated on an authorization to possess is the date that is 12 months after the date of issue of the authorization or, if a shorter period is specified in the application for the authorization under paragraph 6(1)(d), the date on which that period ends.

(2) The “shorter period” referred to in subsection (1) begins on the date of issue of the authorization to possess.

175. Subsection 21(2) of the Regulations is replaced by the following:

(2) If an application is submitted on or before September 30, 2013 to amend an authorization to possess to increase the daily amount of dried marihuana specified in the authorization and the authorization is consequently amended, the Minister shall, if applicable, amend the licence to produce that was issued on the basis of the authorization to reflect the change in the maximum number of marihuana plants that the holder of the licence may produce and the maximum quantity of dried marihuana that the holder of the licence may keep.

(3) If an application is submitted after September 30, 2013 to amend an authorization to possess to increase the daily amount of dried marihuana specified in the authorization and the authorization is consequently amended, the Minister shall not amend the licence to produce that was issued on the basis of the authorization so as to increase the maximum number of marihuana plants that the holder of the licence may produce or the maximum quantity of dried marihuana that the holder of the licence may keep.

176. The portion of subsection 26(1) of the Regulations before paragraph (a) is replaced by the following:

26. (1) An application for a personal-use production licence shall be considered only if it is submitted on or before September 30, 2013 and is made by a person who

177. Section 32 of the Regulations is amended by striking out “or” at the end of paragraph (d), by adding “or” at the end of paragraph (e) and by adding the following after paragraph (e):

(f) the application is submitted after September 30, 2013.

178. Section 33 of the Regulations is replaced by the following:

33. (1) Subject to subsection (2), a personal-use production licence expires on the earlier of

(a) 12 months after its date of issue; and

(b) the date of expiry of the authorization to possess held by the licence holder.

(2) A personal-use production licence expires not later than March 31, 2014.

179. The portion of subsection 36(1) of the Regulations before paragraph (a) is replaced by the following:

36. (1) An application for a designated-person production licence shall be considered only if it is submitted on or before September 30, 2013 and is made by a person who

180. Section 41 of the Regulations is amended by striking out “or” at the end of paragraph (b), by adding “or” at the end of paragraph (c) and by adding the following after paragraph (c):

(d) the application is submitted after September 30, 2013.

181. Section 42 of the Regulations is replaced by the following:

42. (1) Subject to subsection (2), a designated-person production licence expires on the earlier of

(a) 12 months after its date of issue; and

(b) the date of expiry of the authorization to possess on the basis of which the licence was issued.

(2) A designated-person production licence expires not later than March 31, 2014.

182. Section 45 of the Regulations is replaced by the following:

45. The Minister shall refuse an application to renew a licence to produce for any reason referred to in paragraphs 32(a) to (e) or 41(a) to (c), whichever applies.

183. The Regulations are amended by adding the following before section 46:

45.1 The holder of a licence to produce shall not change the location of the production site after September 30, 2013 unless

(a) the person who applied for the licence to produce has, on or before that date, submitted an application under section 46; and

(b) the Minister has accordingly amended the licence under section 47.

45.2 (1) This section applies if

(a) the address of ordinary residence of the holder of a licence to produce is also the address of the site for the production of marihuana that is specified in the licence (referred to in this section as the “production site”);

(b) there is to be a change in the holder’s address of ordinary residence after September 30, 2013; and

(c) the holder does not intend to continue producing marihuana at the production site after that change.

(2) The holder shall, at least 30 days before the day on which the change of address occurs,

(a) notify the Minister in writing of the change, the date on which the change takes effect and the fact that the holder will not produce marihuana at the production site after that date;

(b) request that the Minister revoke the licence to produce as of that date; and

(c) if the holder holds a designated-person production licence, notify in writing the holder of the authorization to possess on the basis of which the licence was issued of the matters referred to in paragraph (a).

(3) Subsection (2) does not apply if

(a) the person who applied for the licence to produce has, on or before September 30, 2013, submitted an application under section 46 concerning a proposed change in the location of the production site; and

(b) the Minister has accordingly amended the licence under section 47.

184. Section 46 of the Regulations is amended by adding the following after subsection (1):

(1.1) An application concerning a proposed change in the location of the production site shall be submitted on or before September 30, 2013.

185. Sections 47 and 48 of the Regulations are replaced by the following:

47. Subject to section 48, if an application complies with subsections 46(1.1) and (2), the Minister shall amend the licence to produce.

48. (1) The Minister shall refuse to amend a licence to produce for any reason referred to in paragraphs 32(a) to (e) or 41(a) to (c), whichever applies.

(2) The Minister shall also refuse to amend a licence if an application concerning a proposed change in the location of the production site is submitted after September 30, 2013.

186. Subsections 50(1) and (2) of the Regulations are replaced by the following:

50. (1) The holder of a licence to produce shall, within 10 days after the change, notify the Minister in writing of

(a) a change in the holder’s name; or

(b) a change in the holder’s address of ordinary residence, other than a case referred to in subsection 45.2(1).

187. Subsection 60(2) of the Regulations is replaced by the following:

(2) If an authorization to possess or licence to produce is revoked, the holder of the authorization or licence shall, within 30 days after the revocation, return to the Minister the revoked document and any other document provided to the holder of the authorization or the licence as proof of their authorization or licence.

(3) Subsection (2) does not apply in the case of a revocation referred to in subsection 62(3).

188. Section 62 of the Regulations is amended by adding the following after subsection (2):

(3) If, in accordance with item 8 of the table to section 197 of the Marihuana for Medical Purposes Regulations, a licensed producer notifies the Minister that the holder of an authorization to possess has become a registered client of the producer, the Minister must, not earlier than 30 days after the day on which the holder was registered, revoke the authorization and any licence to produce issued on the basis of the authorization.

189. The portion of section 64 of the Regulations before paragraph (a) is replaced by the following:

64. The Minister shall not revoke an authorization to possess or a licence to produce under subsection 62(1) or (2) or section 63 or 63.1 unless

190. The Regulations are amended by adding the following after section 69:

69.1 For the purpose of item 11 of the table to section 197 of the Marihuana for Medical Purposes Regulations, if the medical practitioner named in the authorization to possess supporting a registered client’s registration with a licensed producer has advised the Minister in writing that the continued use of dried marihuana by the client is not medically recommended, the Minister shall so advise the licensed producer in writing.

191. The Regulations are amended by adding the following after section 72:

72.1 If an application under these Regulations is received by the Minister before the day on which the
Marihuana for Medical Purposes Regulations
come into force, but the processing of the application has not been completed before that day, the Minister must process the application in accordance with these Regulations as they read on the day on which the processing of the application is completed.

NEW CLASSES OF PRACTITIONERS REGULATIONS

192. Section 3 of the
New Classes of Practitioners Regulations (see footnote 12) is renumbered as subsection 3(1) and is amended by adding the following:

Dried marihuana

(2) A nurse practitioner, as a practitioner, may conduct an activity in respect of dried marihuana in accordance with section 3 or 124 of the Marihuana for Medical Purposes Regulations if they are permitted to prescribe dried marihuana in their practice under the laws of the province in which they are registered and entitled to practise and are not named in a notice issued under section 59 of the Narcotic Control Regulations.

Definition of “dried marihuana”

(3) For the purpose of subsection (2), “dried marihuana” has the same meaning as in subsection 1(1) of the Marihuana for Medical Purposes Regulations.

193. Paragraph 4(2)(b) of the Regulations is replaced by the following:

(b) any of subitems 1(1) and (10) and 2(1) of the schedule to the Narcotic Control Regulations.

TRANSITIONAL PROVISIONS

INTERPRETATION

Definitions

194. (1) For the purpose of sections 195 to 207, “authorization to possess”, “designated-person production licence”, “medical practitioner” and “personal-use production licence” have the same meaning as subsection 1(1) of the
Marihuana Medical Access Regulations.

Medical declaration

(2) For the purpose of sections 195 to 207, “medical declaration” means a medical declaration that is made by a medical practitioner in accordance with sections 6 and 8 of the Marihuana Medical Access Regulations.

REGISTRATION BASED ON AN AUTHORIZATION TO POSSESS

Applicable period

195. Sections 196 and 197 apply until March 31, 2015.

Registration based on authorization to possess

196. (1) For the purpose of subsection 103(2), an individual applying to become a registered client of a licensed producer may submit an authorization to possess instead of a medical document.

Ongoing validity of authorization to possess

(2) An authorization to possess that was valid immediately before the repeal of the
Marihuana Medical Access Regulations
remains valid solely for the purpose of being used as specified in subsection (1).

Modified application of Regulations

197. If, in accordance with section 196, a registration application under section 103 is made on the basis of an authorization to possess, the provisions of these Regulations, other than paragraph 105(a) and section 125, apply in respect of the application, applicant, registration and registered client with the following modifications:

(a) a reference in these Regulations, other than in the consequential amendments set out in sections 145 to 193, to a “medical document” is deemed to include an authorization to possess, except in the case of

(i) the definition “medical document” in subsection 1(1), and

(ii) paragraph 124(b); and

(b) a provision of these Regulations that is referred to in column 1 of the table to this section is to be read as set out in column 2.

TABLE

The following table contrains the provisions of the Regulations and the modified text.

Item

Column 1

Provision

Column 2

Modified text

1.

subparagraph 3(2)(a)(i)

(i) from a licensed producer, in accordance with an authorization to possess, or

2.

subsection 4(1)

(1) An individual who obtains dried marihuana for their own medical purposes or for those of another individual for whom they are responsible from a licensed producer, in accordance with an authorization to possess, must not possess a quantity of dried marihuana that exceeds the lesser of

(a) the quantity specified in the authorization; and

(b) 150 g.

3.

subparagraph 61(a)(ii)

(ii) the name of the medical practitioner that appears on the authorization to possess,

4.

subparagraph 61(a)(iv)

(iv) the daily quantity of dried marihuana determined by the formula

A ⁄ 30

where

A is the maximum quantity of dried marihuana specified in the authorization to possess,

5.

paragraph 94(1)(b)

(b) in respect of a named individual who is a registered client of the producer, the daily quantity of dried marihuana determined by the formula

A ⁄ 30

where

A is the maximum quantity of dried marihuana specified in the authorization to possess supporting the client’s registration.

6.

subparagraph 103(1)(f)(iii)

(iii) subject to section 104, the address of the medical practitioner who made the medical declaration supporting the authorization to possess referred to in subsection 103(2).

7.

subsection 104(1)

(1) If the shipping address specified in a registration application is the one referred to in subparagraph 103(1)(f)(iii), the applicant must include with the application a statement, signed and dated by the medical practitioner who made the medical declaration supporting the authorization to possess referred to in subsection 103(2), indicating that the practitioner consents to receive dried marihuana on behalf of the applicant.

8.

section 105

105. (1) A licensed producer who receives an application under section 103 and intends to register the applicant as a client must communicate with the Minister to confirm the date of issue and date of expiry of the authorization to possess and, if applicable, the reference date indicated on the authorization and to confirm that the authorization has not been revoked.

(2) If the licensed producer registers the applicant as a client, the licensed producer must immediately notify the Minister in writing of the registration and the date of the registration, and provide the Minister with a copy of the authorization to possess.

9.

section 107

107. A client’s registration with a licensed producer expires at the earlier of

(a) one year after the date of issue of the authorization to possess supporting the registration; and

(b) either

(i) the reference date indicated on that authorization, or

(ii) the date of expiry of that authorization, if that authorization has no reference date.

10.

paragraphs 108(d) to (f)

(d) the registration would begin after the reference date indicated on the authorization to possess submitted with the application;

(d.1) in a case in which the authorization to possess has no reference date, the authorization has expired;

(e) the name or date of birth of the applicant is different from the name or date of birth that appears on the authorization to possess;

(f) the Minister informs the licensed producer that the authorization to possess has been or will be revoked; or

11.

paragraphs 110(1)(d) and (e)

(d) the Minister informs the licensed producer in writing that the medical practitioner named in the authorization to possess supporting the client’s registration has advised the Minister in writing that the continued use of dried marihuana by the client is not medically recommended; or
(e) the medical practitioner named in the authorization to possess is named in a notice issued under section 59 of the Narcotic Control Regulations.

12.

subsection 120(1)

(1) A licensed producer must not sell or provide to a registered client in any 30-day period a total quantity of dried marihuana that exceeds the maximum quantity specified in the authorization to possess supporting the client’s registration.

REGISTRATION BASED ON A MEDICAL DECLARATION

Applicable period

198. Sections 199 and 200 apply until March 31, 2014.

Registration based on medical declaration

199. For the purpose of subsection 103(2), an individual applying to become a registered client of a licensed producer may submit a medical declaration instead of a medical document.

Modified application of Regulations

200. If, in accordance with section 199, a registration application under section 103 is made on the basis of a medical declaration, the provisions of these Regulations, other than paragraph 105(a) or section 125, apply in respect of the application, applicant, registration and registered client with the following modifications:

(a) a reference in these Regulations, other than in the consequential amendments set out in sections 145 to 193, to a “medical document” is deemed to include a medical declaration, except in the case of

(i) the definition “medical document” in subsection 1(1), and

(ii) paragraph 124(b); and

(b) a provision of these Regulations that is referred to in column 1 of the table to this section is to be read as set out in column 2.

TABLE

The following table contains the provisions of the Regulations and the modified text.

Item

Column 1

Provision

Column 2

Modified text

1.

subparagraph 3(2)(a)(i)

(i) from a licensed producer, in accordance with a medical declaration, or

2.

subsection 4(1)

(1) An individual who obtains dried marihuana for their own medical purposes or for those of another individual for whom they are responsible from a licensed producer, in accordance with a medical declaration, must not possess a quantity of dried marihuana that exceeds the lesser of

(a) 30 times the daily amount specified in the medical declaration; and

(b) 150 g.

3.

subparagraph 61(a)(ii)

(ii) the name of the medical practitioner who made the client’s medical declaration,

4.

section 107

107. (1) A client’s registration with a licensed producer expires at the earlier of

(a) one year after the day on which the medical declaration supporting the registration was signed by the medical practitioner; and

(b) if applicable, the day on which the period of usage specified in the medical declaration expires.

(2) For the purpose of paragraph (1)(b), the period of use begins on the day on which the medical declaration was signed by the medical practitioner.

5.

paragraphs 108(d) to (f)

(d) more than one year has elapsed since the day on which the medical declaration submitted with the application was signed by the medical practitioner;

(d.1) if applicable, the period of usage specified in the medical declaration has expired, with that period being deemed to have commenced on the day on which the medical declaration was signed by the medical practitioner;

(e) the name or date of birth of the applicant is different from the name or date of birth that appears on the medical declaration;

(f) the medical practitioner who made the medical declaration informs the licensed producer in writing that the use of dried marihuana by the applicant is not medically recommended; or

6.

subsection 120(1)

(1) A licensed producer must not sell or provide to a registered client in any 30-day period a total quantity of dried marihuana that exceeds 30 times the daily amount specified in the medical declaration supporting the client’s registration.

SALE OR PROVISION OF MARIHUANA TO LICENSED PRODUCER

Applicable period

201. Sections 202 to 207 apply until March 31, 2014.

Sale or Provision by Holder of a Personal-use Production Licence

Authorized sale

202. The holder of a personal-use production licence may sell or provide marihuana plants or seeds to a licensed producer if the holder does so in accordance with a notice of authorization issued by the Minister under subsection 204(2).

Application for authorization

203. (1) The holder of a personal-use production licence who proposes to sell or provide marihuana plants or seeds to a licensed producer must submit to the Minister an application for authorization of the proposed sale or provision that contains the following information:

(a) in respect of the holder of the personal-use production licence:

(i) their name and date of birth,

(ii) the number of their licence,

(iii) the address of the place where they ordinarily reside, and

(iv) the address of the site where the production of marihuana is authorized;

(b) in respect of the licensed producer:

(i) their name,

(ii) the number of their licence,

(iii) the address of their site, and

(iv) the name of their senior person in charge; and

(c) a description of the marihuana plants or seeds that are to be sold or provided and their quantity.

Signature

(2) The application must be signed and dated by the holder of the personal-use production licence and by the licensed producer’s senior person in charge and include a statement by each of them indicating that all of the information submitted in support of the application is correct and complete to the best of that person’s knowledge.

Verification by Minister

204. (1) The Minister must, after examining the application and information required under section 203, verify if the following conditions are met:

(a) the personal-use production licence and the licensed producer’s licence are valid; and

(b) the number of marihuana plants to be sold or provided, if any, does not exceed the maximum number of plants specified in the personal-use production licence.

Notice of authorization

(2) If the conditions are met, the Minister must send to both parties a notice of authorization of the proposed sale or provision that

(a) specifies the names of the parties, the type of licence held by each party and the licence numbers;

(b) describes the marihuana plants or seeds that are to be sold or provided and their quantity;

(c) specifies that the notice is valid only for the sale or provision in respect of which it is issued;

(d) specifies that the notice is valid only if the licences referred to paragraph (1)(a) are valid at the time of the sale or provision; and

(e) specifies that the sale or provision must be completed not later than 30 days after the date of the notice.

Notice of refusal

(3) If the conditions are not met, the Minister must send to each of the parties a notice of refusal of the proposed sale or provision that sets out the reasons for the refusal.

Opportunity to be heard

(4) The parties may, within 10 days after the receipt of a notice of refusal, provide the Minister with reasons why the refusal is unfounded.

Sale or Provision by Holder of a Designated-person Production Licence

Authorized sale

205. The holder of a designated-person production licence may sell or provide marihuana plants or seeds to a licensed producer if the holder does so in accordance with a notice of authorization issued by the Minister under subsection 207(2).

Application for authorization

206. (1) The holder of a designated-person production licence who proposes to sell or provide marihuana plants or seeds to a licensed producer must submit to the Minister an application for authorization of the proposed sale or provision that contains the following information:

(a) in respect of the holder of the designated-person production licence:

(i) their name and date of birth,

(ii) the number of their licence,

(iii) the address of the place where they ordinarily reside, and

(iv) the address of the site where the production of marihuana is authorized;

(b) in respect of the holder of the authorization to possess on the basis of which the designated-person production licence was issued:

(i) their name and date of birth,

(ii) the number of their authorization,

(iii) the address of the place where they ordinarily reside, and

(iv) an indication that they consent to the proposed sale or provision;

(c) in regard to the licensed producer:

(i) their name,

(ii) the number of their licence,

(iii) the address of their site, and

(iv) the name of their senior person in charge; and

(d) a description of the marihuana plants or seeds that are to be sold or provided and their quantity.

Signature

(2) The application must be signed and dated by the holder of the designated-person production licence, the holder of the authorization to possess and the licensed producer’s senior person in charge and include a statement by each of them indicating that all of the information submitted in support of the application is correct and complete to the best of that person’s knowledge.

Separate applications

(3) If a person is the holder of more than one designated-person production licence and proposes to sell or provide marihuana plants or seeds produced under each of those licences, a separate application must be submitted in respect of each licence.

Verification by Minister

207. (1) The Minister must, after examining the application and information required under section 206, verify if the following conditions are met:

(a) the designated-person production licence, the authorization to possess and the licensed producer’s licence are valid;

(b) the designated-person production licence was issued on the basis of the authorization to possess;

(c) the holder of the authorization to possess has signed the application; and

(d) the number of marihuana plants to be sold or provided, if any, does not exceed the maximum number of plants specified in the designated-person production licence.

Notice of authorization

(2) If the conditions are met, the Minister must send to the holder of the designated-person production licence, the holder of the authorization to possess and the licensed producer a notice of authorization of the proposed sale or provision that

(a) specifies the names of those persons, the type of licence or authorization held by each person and the numbers of the licences and the authorization;

(b) describes the marihuana plants or seeds that are to be sold or provided and their quantity;

(c) specifies that the notice is valid only for the sale or provision in respect of which it is issued;

(d) specifies that the notice is valid only if the licences referred to paragraph (1)(a) are valid at the time of the sale or provision; and

(e) specifies that the sale or provision must be completed not later than 30 days after the date of the notice.

Notice of refusal

(3) If the conditions are not met, the Minister must send to each of the persons referred to in subsection (2) a notice of refusal of the proposed sale or provision that sets out the reasons for the refusal.

Opportunity to be heard

(4) The recipients of a notice of refusal may, within 10 days after the receipt of the notice, provide the Minister with reasons why the refusal is unfounded.

REPEAL

COMING INTO FORCE

209. (1) Subject to subsections (2) to (4), these Regulations come into force on the day on which they are registered.

October 1, 2013

(2) Section 186 comes into force on October 1, 2013.

March 31, 2014

(3) Subsections 160(2) and 164(4) and section 208 come into force on March 31, 2014.

March 31, 2015

(4) Subsection 164(5) comes into force on March 31, 2015.

[50-1-o]

Footnote 1
Marihuana produced under contract with Her Majesty in right of Canada or under a DPPL, other than marihuana sold or imported to be used in clinical trials, is exempted from the application of the Food and Drugs Act and its regulations.

Footnote 2
Under Schedule II of the CDSA, cannabis includes cannabis, its preparations, derivatives and similar synthetic preparations. This would include substances such as THC and cannabidiol, as well as marihuana.

Footnote 3
Producer surplus is an economic measure of the difference between the amount that a producer of goods actually receives, and the minimum amount that he or she would accept.

Footnote 4
Deadweight loss is the cost to society created by market inefficiency.

Footnote 5
Consumer surplus is an economic measure of user benefit over and above what is reflected in the price users pay for acquiring the good.

Footnote 6
Accrue only to small businesses, which are projected to make up 100% of licensed producers in years 1 and 2.

Footnote 7
Accrue only to small businesses, which are projected to make up 100% of licensed producers in years 1 and 2.